In: Accounting
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 the following.
Variable costs (based on mugs produced): | ||
Direct materials cost | $ | 2,600 |
Direct manufacturing labor costs | 20,790 | |
Indirect manufacturing costs | 1,060 | |
Administration and marketing | 2,410 | |
Fixed costs: | ||
Administration and marketing costs | 11,900 | |
Indirect manufacturing costs | 4,150 | |
On December 31, year 1, direct materials inventory consisted of
2,600 pounds of material. Production in that year was 13,000 mugs.
All prices and unit variable costs remained constant during the
year. Sales revenue for year 1 was $40,700. Finished goods
inventory was $4,400 on December 31, year 1. Each finished mug
requires 0.4 pounds of material.
Required:
a. Compute the direct materials inventory cost, December 31, year 1. (Round your answer to 2 decimal places.)
b. Compute the finished goods ending inventory in units on December 31, year 1.
c. Compute the selling price per unit. (Round your answer to 2 decimal places.)
d. Compute the operating profit (loss) for year 1.
(For all the requirements, do not round intermediate calculations.)