2. Prepare an income statement. Sales WALLACE RIVER COMPANY Income Statement For the Year Ended December 31 Cast of goods sold: Finished goods inventory, beginning Add: Cost of goods manufactured Goods available for sale Deduct: Finished goods inventory, ending Gross margin Selling and administrative expenses: Administrative expense Advertising expense Selling expense Operating income S 450,000 S 10,000 290,000 300,000 40,000 260,000 190,000 70,000 20,000 80,000 0 S 170,000 20,000 3. Assume that the company produced 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? (Round your answers to 2 decimal places.) Cost Per Unit Direct materials Factory depreciation 4. Assume that the company expects to produce and sell 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 and for factory depreciation at this level of activity? Assume that raw materials costs charged by suppliers will not change next year. For factory depreciation, assume that the company uses straight-line depreciation and that the factory equipment has five years of useful life remaining. (Round your answers to 2 decimal places.) Direct materials Factory depreciation Cost Per Unit Total Cost