Question

Mary's Mugs produces and sells various types of ceramic mugs. The business began operations on January 1, year 1, and its costs incurred during the year include these Variable costs (based on mugs produced): Direct materials cost Direct manufacturing labor costs Indirect manufacturing costs Administration and marketing s 3,000 12,810 1,000 2,360 Fixed costs Administration and marketing costs Indirect manufacturing costs 11,300 4,190 On December 31. year 1, direct materials inventory consisted of 3,000 pounds of material. Production in that year was 10.000 mugs. All prices and unit variable costs remained constant during the year Sales revenues for year 1 was $31 200. Finished goods inventory was $4.200 on December 31, year 1. Each finished mug requires 0.4 pounds of material. (Do not round intermediate calculations.)

Answer 1

c) Selling Price Per Unit No. of Units Sold During The Year Opening Stock+Units Produced-Closing Stock 0+10000-2000 8000 Units Selling Price Per Unit UNITS SOLD 8000 Selling Price Per Unit $3.90 d) 31200 16800 14400 Revenue Less: Cost of Goods sold Gross Profit Less: Administrative Cost Variable Fixed 2360 11300 13660 740

A) Direct Material Inventory Cost Direct material Cost/UNIT $0.30 PER MUG Unit Produced 40Pounds 10000 Direct Material used per Mug Direct Material Cost Pound $0.30 40 Pounds $0.75 PER Pound irect Material Cost/ Unit Direct Material Used Per Mug $.75x3000 Direct Material Inventory Cost - $2,250.00 B) Finished Goods Inventory in units) Manufacturing cost per unit 4200 $2.10 2000 Units Manufacturing Cost/unit urtndirect Manufacturin Units Manufactured During The Year 10000 Mugs 21000 10000 $2.10