Various cost and sales data for Medco, Inc., are given below for the just completed year:

Required:
1. Prepare a schedule of cost of goods manufactured.
2. Prepare an income statement.
3. Assume that the company produced the equivalent of 10,000 units of product during the year. What was the average cost per unit for direct materials? What was the average cost per unit for factory depreciation?
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 factory depreciation? (In preparing your answer, assume that direct materials is a variable cost and that depreciation is a fixed cost; also assume that depreciation is computed on a straight-line basis.)
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.

E3 Microsoft Excel Problem 2-19 screen capturexis Be Edit Yew hert Pgrnat Tools Deta Window Help - a da @ izi t oa wReplyvnthQuget. . E Renew Arial 38 $90,000 2 Raw materials inventory, beginning $10,000 $17,000 $42,000 $5,000 $60,000 $30,000 $70,000 $450,000 $27,000 $1,000 $80,000 $65,000 14 Work in process inventory beginning$7,000 15 Work in process inventory, ending 30,000 16 Finished goods inventory, beginning $10,000 17 Finished goods inventory, ending $40,000 1 Purchases of raw materials 3 Raw materials inventory, ending 4 . Depreciation, factory Insurance, factory 6 Direct labor 7 Maintenance, factory 8 Administrative expenses 9 Sales 10 Utilities, factory 11 Supplies, factory 12 Selling expenses 13 Indirect labor 18 1 Ready