Product cost under full versus variable costing

Kates Kale Chips produces a healthy snack made primarily of kale. Each bag of the product sells for $5. The company computes the manufacturing overhead rate on a quarterly basis based upon the planned number of units to be produced that quarter. The following data are from the projections of Kates Kale Chips for the upcoming quarter:

	Projections
Sales	20,000 bags
Production	22,000 bags
Variable manufacturing cost per bag	$2.00
Sales and distribution costs per bag	$0.15
Total fixed manufacturing overhead	$33,000
Fixed administrative overhead	$18,000

Required

Compute the projected product cost per bag produced under full costing.

Compute the projected product cost per bag under variable costing.