Question

Various cost and sales data for Medco Inc. are given for the just-completed year:

Purchases of raw materials	$	171,600
Raw materials inventory, beginning		13,200
Raw materials inventory, ending		21,000
Depreciation, factory		82,800
Insurance, factory		5,800
Direct labour		65,600
Maintenance, factory		33,200
Administrative expenses		76,400
Sales		640,000
Utilities, factory		31,000
Supplies, factory		1,080
Selling expenses		87,200
Indirect labour		70,600
Work in process inventory, beginning		7,400
Work in process inventory, ending		31,600
Finished goods inventory, beginning		11,200
Finished goods inventory, ending		44,800

Required:

1.	Prepare a schedule of cost of goods manufactured.

       

2.	Prepare an income statement.

       

3.	Assume that the company produced the equivalent of 18,000 units of product during the year. What was the average cost per unit for direct materials? What was the average cost per unit for factory depreciation? (Round your answers to 2 decimal places.)

       

4.

Assume that the company expects to produce 23,000 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 is a variable cost and that depreciation is a fixed cost; also assume that depreciation is computed on a straight-line basis.) (Do not round intermediate calculations. Round "Average cost per unit" answers to 2 decimal places.)

       

Answer 1