Mary\'s Mugs produces and sells various types of ceramic mugs. The business bega
ID: 2335000 • Letter: M
Question
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 these: 3,750 23,190 1,110 2,410 4,200 consisted of 3,750 pounds of material Production in that year was 15,000 mugs. All prices and unit variable costs remained constant during the year. Sale revenues for year 1 was $50,050. Finished goods Required: a Compute the direct materials inventory cost, December 31, year 1 was $4,300 on December 31, year 1. Each finished mug requires 04 pounds of material. (Do not round Intermedlate calculations) Answer is complete and correct. b. Compute the finished goods ending inventory in units on December 3 31, year 1. (De not round Intermediate calculations) O Answer is complete and correct. 2,000 G e. Compute the selling price per unt (Round your answer to 2 decimal places) O Answer is complete and correct. 385 d. Compute the operating profit (loss) for year 1 O Answer is complete but not entirely correct.Explanation / Answer
Mary's Mugs Income Statement Year Ended December 31 Revenue (13000*$3.85) $50,050 Less: Cost of Goods Sold ($2.15*13000) $27,950 Gross Profit $22,100 Less: Administration and Marketing Cost ( $2410+12200) $14,610 Net Operating Income (Loss) $7,490 Working Note: Manufacturing Cost/Unit Variable Cost Direct Material Cost $3,750 Direct Manufacturing Cost $23,190 Indirect Manufacturing Cost $1,110 Fixed Cost Indirect Manufacturing Cost $4,200 Totsl cost of Goods Manufactured $32,250 No. of Unit Produced 15,000.00 Manufacturing Cost / Unit $2.15 Working Note: Computation of Unit Goods Sold Beginning Inventory Production 15000 Less: Finished Goods Inventory 2000 No. of Unit Sold 13000