Houston Houston Office Equipment manufactures and sells metal shelving. It started operations on January 1, 2014.

The costs incurred for 2014 are as follows (V means variable; F means fixed):

direct materials used	$149,500	V
Direct manufacturing labor costs	31,500	V
plant energy costs	3,000	V
Manufacturing overhead costs	15,000	V
Manufacturing overhead costs	12,000	F
Other indirect manufacturing costs	10,000	V
Other indirect manufacturing costs	32,000	F
Marketing, distribution and customer service costs	126,000	V
Marketing, distribution and customer service costs	48,000	F
Administrative costs	57,000	F

Variable manufacturing costs are variable with respect to units produced. Variable marketing, distribution, and customer service costs are variable with respect to units sold.

The inventory data is as follows:

	Beginning:		Finishing:
	January 1st, 2014		December 31, 2014
Direct materials	0	pounds	1,900	pounds
Work in progress	0	units	0	units
Finished products	0	units	?	units

Production in 2014 was 115,000 units. Two pounds of direct materials are used to make one unit of finished product.

Income in 2014 was $583,200. The sales price per unit and the purchase price per pound of direct materials were flat throughout the year. The company's ending inventory of finished goods is carried at average unit manufacturing cost for 2014.

Finished goods inventory as of December 31, 2014 was $15,400.

Requirements

1. Calculate direct materials inventory, full cost, December 31, 2014.

2. Calculate finished goods inventory, total units, December 31, 2014.

3. Calculate the sale price in 2014.

4. Calculate the operating profit for 2014.

Answer rating: 100% (QA)

Calculate direct materials inventory full cost December 31 2014 First we need to find the direct materials used during the year Direct materials used ... View the full answer