Capital Manufacturing produces a unique souvenir product for various museums around the country. During the year, the company incurred the following costs: Direct material used $100,000 Direct labor 80,000 Manufacturing overhead 50,000 Marketing
expenses 15,000 Administrative expenses 20,000 During the year, 25,000 units were produced out of which 20,000 units were sold for $20 each. Required: A. Calculate the total product costs incurred for the year. B. What is the product cost per unit? C. What is cost of goods sold for the year? D. What is net operating income for the year? (Ignore taxes)
A. Total product costs = $230,000 ($100,000 + 80,000 + 50,000)
B. Product cost per unit = $9.20 ($230,000/25,000 units)
C. Cost of goods sold = $184,000 ($9.20 per unit x 20,000 units sold)
D. Net operating income = $181,000 [(20,000 units x $20 ) - 184,000 - 15,000 - 20,000]
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