Reference no: EM132225360

Question - Stuart Manufacturing Company was started on January 1, 2018, when it acquired $89,000 cash by issuing common stock. Stuart immediately purchased office furniture and manufacturing equipment costing $32,000 and $40,000, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $4,000 salvage value and an expected useful life of six years. The company paid $12,000 for salaries of administrative personnel and $21,000 for wages to production personnel. Finally, the company paid $26,000 for raw materials that were used to make inventory. All inventories was started and completed during the year. Stuart completed production on 10,000 units of product and sold 8,000 units at a price of $9 each in 2018. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.)

Determine the total product cost and the average cost per unit of the inventory produced in 2018.