a.compute the direct materials inventory cost, December 31, year
Direct material cost per unit | direct material cost/units produced | $6000/20000mugs | $0.30per mug |
Direct material used per mug | 0.40 pounds | ||
Direct material cost per pound | $0.30/0.40 | $0.75per pound | |
Direct material inventory | 6000*$0.75 | $4500 |
b.compute the finished goods ending inventory in units on December 31,year
Finished goods inventory (in units)= | Finished goods inventory/manufacturing cost per unit | ||
Manufacturing cost per unit | (direct material+direct labour+indirect manufacturing cost/units produced | ($6000+$31670+$1070+$4260)/20000 | $2.15 per unit |
Finished goods inventory (in units) | $4300/$2.15 | 2000units | |
c.compute the selling price per unit
Selling price per unit | Revenues/units sold | ||
Units sold | units produced- units in the ending finished goods inventory | 20000-2000 | 18000 |
Selling price per uni | $66600/18000 | $3.7 |
d.compute operating profit (loss)
Operating income for the year | |||
(a) Revenue | $66600 | ||
(b) cost of goods sold (1800*2.15) | $38700 | ||
(c) gross margin (c=a-b) | $27900 | ||
Less marketing and administration cost | |||
(d) variable cost | $2060 | ||
(e) fixed cost | $11600 | $13660 | |
(f) operating profit (c-d+e) | $14240 |
THANK YOU
ALL THE BEST
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