Reference no: EM132479300

Various cost and sales data for Merlwell Company for the just completed year follow:

Finished goods stock, beginning                    $20,000

Finished goods stock, ending                          40,000

Depreciation, factory                                    27,000

Administrative expenses                               110,000

Utilities, factory                                            8,000

Maintenance, factory                                   40.000

Supplies, factory                                          11,000

Insurance, factory                                          4,000

Purchases of raw materials                             125,000

Raw materials stock, beginning                           9,000

Raw materials stock, ending                                6,000

Direct labour                                                    70,000

Indirect labour                                                 15,000

Work in progress stock, beginning                      17,000

Work in progress stock, ending                           30,000

Sales                                                              500,000

Selling expenses                                                  80,000

Question 1: Prepare a schedule of cost of goods manufactured.

Question 2: Prepare a profit and loss account.

Question 3: Assume that the company produced the equivalent of 10,000 units of product during the year just completed. What was the unit cost for direct materials?

Question 4: What was the unit cost for factory depreciation?

Question 5: Assume that the company expects to produce 15,000 units of product during the coming year. What per unit cost 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.