Foxwood Company is a metal- and woodcutting manufacturer, selling products to the home construction market. Consider the following data for 2017:

Required 

1. Prepare an income statement with a separate supporting schedule of cost of goods manufactured.

For all manufacturing items, classify costs as direct costs or indirect costs and indicate by V or F whether each is a variable cost or a fixed cost (when the cost object is a product unit). If in doubt, decide on the basis of whether the total cost will change substantially over a wide range of units produced.

2. Suppose that both the direct material costs and the plant-leasing costs are for the production of 900,000 units. What is the direct material cost of each unit produced? What is the plant-leasing cost per unit? Assume that the plant-leasing cost is a fixed cost.

3. Suppose Foxwood Company manufactures 1,000,000 units next year. Repeat the computation in requirement 2 for direct materials and plant-leasing costs. Assume the implied cost-behavior patterns persist.

4. As a management consultant, explain concisely to the company president why the unit cost for direct materials did not change in requirements 2 and 3 but the unit cost for plant leasing costs did change.

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Sandpaper $ 2,000 Materials-handling costs 70,000 Lubricants and coolants 5,000 Miscellaneous indirect manufacturing labor 40,000 Direct manufacturing labor 300,000 Direct materials inventory, Jan. 1, 2017 40,000 Direct materials inventory, Dec. 31, 2017 50,000 Finished-goods inventory, Jan. 1, 2017 100,000 Finished-goods inventory, Dec. 31, 2017 150,000 Work-in-process inventory, Jan. 1, 2017 10,000 Work-in-process inventory, Dec. 31, 2017 14,000 Plant-leasing costs 54,000 Depreciation-plant equipment 36,000 Property taxes on plant equipment 4,000 Fire insurance on plant equipment 3,000 Direct materials purchased 460,000 Revenues 1,360,000 Marketing promotions 60,000 Marketing salaries 100,000 Distribution costs 70,000 Customer-service costs 100,000