Heaven Consumer Products Inc. has the following sales and cost data for 19A
Selling and administrative expenses
$25000
Direct materials purchased
12000
Direct labor
18000
Sales
160000
Direct materials inventory beginning
3000
Direct materials inventory ending
2000
Work-in-process beginning
14000
Work-in-process ending
13500
Factory depreciation
27000
Indirect materials
4000
Factory utilities
2000
Indirect labor
5500
Maintenance
2000
Insurance
1000
Finished goods inventory beginning
6000
Finished goods inventory ending
4000
1. Prepare a schedule of cost of goods manufactured for 19A.
2. Prepare an income statement for 19A.
3. Assume that the company manufactured 5000units during the year. What was the unit cost of direct materials? What was the unit cost of factory
depreciation? (Assume that depreciation is computed by the straight-line method.)
4. Repeat the computation done in part 3 for 10000 units of output. How would the total costs of direct materials and factory overhead be affected?
5. Comment on the results you obtained in parts 3 and 4 in terms of how they affect the possible sales price.