A UK-based company Office Essentials manufactures and sells metal shelving. It began operations on January 1, 2020. Costs incurred for 2020 are as follows (V stands for variable; F stands for fixed):

Variable manufacturing costs are variable with respect to units produced. Variable marketing, distribution, and customer-service costs are variable with respect to units sold. 

Inventory data are as follows:

Production in 2020 was 115,000 units. Two pounds of direct materials are used to make one unit of finished product.
Revenues in 2020 were £540,000. The selling price per unit and the purchase price per pound of direct materials were stable throughout the year. The company’s ending inventory of finished goods is carried at the average unit manufacturing cost for 2020. On December 31, 2020, finished-goods inventory was £15,400.

Required

1. Calculate direct materials inventory, total cost, December 31, 2020.
2. Calculate finished-goods inventory, total units, December 31, 2020.
3. Calculate the selling price in 2020.
4. Calculate the operating income for 2020.

Transcribed Image Text:

Direct materials used Direct manufacturing labor costs Plant energy costs Indirect manufacturing labor costs Indirect manufacturing labor costs Other indirect manufacturing costs Other indirect manufacturing costs Marketing, distribution, and customer-service costs Marketing, distribution, and customer-service costs Administrative costs £149,500 V 34,500 V 6,000 V 12,000 V 17,000 F 7,000 V 27,000 F 126,000 V 47,000 F 58,000 F