Various cost and sales data for Medco nc. for the just completed year appear in the worksheet below:

Of the $105,000 of manufacturing overhead, $15,000 is variable and $90,000 is fixed.

Required:

1. Prepare a schedule of cost of goods manufactured.

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2. Prepare an income statement.

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3. Assume that the company produced the equivalent of 10,000 units of product during the year just completed. What was the average cost per unit for direct materials? What was the average cost per unit for fixed manufacturing overhead?

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4. Assume that the company expects to produce 15,000 units of product during the coming year. What average cost per unit and what total cost would you expect the company to incur for direct materials at this level of activity? For fixed manufacturing overhead? Assume that direct materials is a variable cost.

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5. As the manager responsible for production costs, explain to the president any difference in the average costs per unit between (3) and (4) above.

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Microsoft Excel Ek Eat Yen Insert Farmot Iods Date Wirdow Hep E- 100% 12 BIUD E17 A B 1 Finished goods inventory, beginning 2 Finished goods inventory, ending 3 Administrative expenses 4 Manufacturing overhead 5 Purchases of raw materials 6 Raw materials inventory, beginning 7 Raw materials inventory, ending 8 Direct labor 9 Work in process inventory, beginning 10 Work in process inventory, ending 11 Sales 12 Selling expenses $20,000 $40,000 $110,000 $105,000 $125,000 $9,000 $6,000 $70,000 $17,000 $30,000 $500,000 $80,000 13 N H Sheet1/ Sheet2 Shee13/ X Gx会 ト Microsoft Excel Ek Eat Yen Insert Farmot Iods Date Wirdow Hep E- 100% 12 BIUD E17 A B 1 Finished goods inventory, beginning 2 Finished goods inventory, ending 3 Administrative expenses 4 Manufacturing overhead 5 Purchases of raw materials 6 Raw materials inventory, beginning 7 Raw materials inventory, ending 8 Direct labor 9 Work in process inventory, beginning 10 Work in process inventory, ending 11 Sales 12 Selling expenses $20,000 $40,000 $110,000 $105,000 $125,000 $9,000 $6,000 $70,000 $17,000 $30,000 $500,000 $80,000 13 N H Sheet1/ Sheet2 Shee13/ X Gx会 ト