W. W. Phillips Company produced 4,000 leather recliners during the year. These recliners sell for $400 each. Phillips had 500 recliners in finished goods inventory at the beginning of the year. At the end of the year, there were 700 recliners in finished goods inventory. Phillips€™ accounting records provide the following information:

Required:
1. Prepare a statement of cost of goods manufactured.
2. Compute the average cost of producing one unit of product in the year.
3. Prepare an income statement for external users.

Transcribed Image Text:

串90,000 180,000 300,000 200,000 Beginning work-in-process inventory 13,040 14,940 42,000 Beginning finished goods inventory 80,000 114,100 Salary, sales supervisor Purchases of raw materials Beginning materials inventory Ending materials inventory Direct labor Indirect labor Rent, factory building Depreciation, factory equipment Utilities, factory $320,000 46,800 Commissions, salespersons 66,800 General administration 40,000 Ending work-in-process inventory 60,000 Ending finished goods invento 11,900