Data for a Firm's First Year of Operation Is Given

question 54

Short Answer

Data for a firm's first year of operation is given below. The firm uses direct costing. $\begin{array} { l r } \text { Units produced (no work in process) } & 6,000 \\\text { Units sold } & 5,000 \\\text { Units in ending inventory of finished goods } & 1,000 \\\text { Sales price for each unit } & \$ 75 \\\text { Variable manufacturing costs for each unit manufactured } & \$ 30 \\\text { Variable selling and admin. expenses for each unit sold } & \$ 16 \\\text { Fixed manufacturing costs for the year } & \$ 90,000 \\\text { Fixed selling and admin. expenses for the year } & \$ 65,000\end{array}$ 1. What is the ending inventory of finished goods?
2. What is the cost of goods sold?
3. What is the manufacturing margin for the year?
4. What is the net income (loss) for the year?

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Definitions:

Antimacassars

Protective coverings placed over the back or arms of furniture to prevent dirt or wear, often made of lace or embroidered fabric.

Labor Supply Curve

A graphical representation showing the relationship between the wage rate and the quantity of labor workers are willing to provide.

Marginal Cost

The change in total cost that arises when the quantity produced is incremented by one unit, essentially the cost of producing one more unit of a good.

Weekly Wage

The total amount of money paid to an employee for work done in a single week.