Question

Various cost and sales data for Meriwell Company for the just-completed year follow:

Finished goods inventory, beginning	$	25,000
Finished goods inventory, ending		50,000
Depreciation, factory		19,000
Administrative expenses		105,000
Utilities, factory		7,000
Maintenance, factory		55,000
Supplies, factory		12,000
Insurance, factory		3,600
Purchases of raw materials		130,000
Raw materials inventory, beginning		9,000
Raw materials inventory, ending		6,000
Direct labour		75,000
Indirect labour		18,000
Work-in-process inventory, beginning		22,000
Work-in-process inventory, ending		24,000
Sales		525,000
Selling expenses		74,000

Required:

1.	Prepare a schedule of cost of goods manufactured.

      

2.	Prepare an income statement.

      

3.	Assume that the company produced the equivalent of 10,000 units of product during the year just completed. What was the average cost per unit for direct materials and factory depreciation? (Round your answers 2 to decimal places.)

      

4.

Assume that the company expects to produce 25,000 units of product during the coming year. What average cost per unit and what total cost would you expect the company to incur for direct materials at this level of activity? For factory depreciation? (In preparing your answer, assume that direct materials are a variable cost and that depreciation is a fixed cost; also, assume that depreciation is computed on a straight-line basis.) (Round your "Average Cost'' answers 2 to decimal places.)