The following selected account balances for the year ended December 31 are provided for Valenko Company:
Advertising expense . . . . . . . . . . . . . . . . . . $215,000
Insurance, factory equipment. . . . . . . . . . . . $8,000
Depreciation, sales equipment. . . . . . . . . . . $40,000
Rent, factory building . . . . . . . . . . . . . . . . . . $90,000
Utilities, factory. . . . . . . . . . . . . . . . . . . . . . . $52,000
Sales commissions . . . . . . . . . . . . . . . . . . . $35,000
Cleaning supplies, factory . . . . . . . . . . . . . . $6,000
Depreciation, factory equipment . . . . . . . . . $110,000
Selling and administrative salaries. . . . . . . . $85,000
Maintenance, factory . . . . . . . . . . . . . . . . . . $74,000
Direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . ?
Purchases of raw materials . . . . . . . . . . . . . $260,000
Inventory balances at the beginning and end of the year were as follows:

The total manufacturing costs for the year were $675,000; the goods available for sale totaled $720,000; and the cost of goods sold totaled $635,000.

Required:
1. Prepare a schedule of cost of goods manufactured and the cost of goods sold section of the company€™s income statement for the year.
2. Assume that the dollar amounts given above are for the equivalent of 30,000 units produced during the year. Compute the average cost per unit for direct materials used, and compute the average cost per unit for rent on the factory building.
3. Assume that in the following year the company expects to produce 50,000 units. What average cost per unit and total cost would you expect to be incurred for direct materials? For rent on the factory building? (Assume that direct materials is a variable cost and that rent is a fixed cost.)
4. As the manager in charge of production costs, explain to the president the reason for any difference in the average costs per unit between (2) and (3)above.

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Beginning of Year End of Year S0000 400 $40,000 Raw materials. Work in process Finished goods $30,000 $30.000 $33,000