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. Phillip’s accounting records provide the following information: lop25

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Purchases of raw materials Raw materials inventory, December 31, 2000 Raw materials inventory, December 31, 2001 Direct labor Indirect labor $320,000 46,800 66,800 200,000 40,000 (continued)