Cognito Crafts creates captivating carved creations for competent customers that crave cinching challenges. Cognito Crafts specializes in hand$-$assembled wooden puzzles. Anya, the sole craftsperson, creates each puzzle using intricately laser$-$cut pieces and high$-$quality wood. Each puzzle consists of two main components: the painstakingly designed puzzle base and the individual wooden pieces. To produce a puzzle, the base is laser$-$cut from plywood, and the individual pieces are exactingly cut from sustainably sourced hardwood. Finished puzzles are packaged in custom$-$designed boxes $($packaging is considered part of the production cost, thus finishing a puzzle involves boxing it as well$).$

Cognito Crafts produces the puzzles at a maker$-$space, which has all the necessary equipment for laser cutting and woodworking, and pays an annual rent of $$12,000.$ This covers utilities and equipment usage. The space also provides ample storage space for materials and inventory at no additional cost.

Anya completed one production run in $2023,$ and ended the year with $35$ completed puzzles unsold $($i$.$e$.$ still in the finished goods$).$ The ending inventory balance at the end of the run was as follows:

Item Ending Balance $($$$)$

Plywood $$315$

Glue $$144$

Box Hardware $$120$

Puzzles in Process $$2,400$

Finished Puzzles $$5,950$

In $2024,$ Anya $($who works part time$)$ finished $300$ puzzles. Cognito Crafts sold $325$ puzzles, and the revenue from the sales was $$73,125.$ During $2024,$ Cognito Crafts incurred the following expenses:

Item Expense $($$$)$

Wages to Anya for Production $$40,000$

Maker$-$space annual rent fee $$12,000$

Plywood $$2,955$

Glue $$450$

Box Hardware $$900$

SG&A Expenses $$2500$

Delivery Expenses $($Shipping$)$ $$1000$

The ending balance at the end of $2024$ was as follows:

Item Ending Balance $($$$)$

Plywood $$126$

Glue $$336$

Box Hardware $$60$

Puzzles in Process $$4,980$

Finished Puzzles $$1,792$

Please answer the following questions ignoring taxes and assuming that Cognito Crafts uses Full Absorption costing unless specified otherwise:

$1.$ what is total COGM for $2024$

$2.$ what is COGS in $2024$

$3.$ What is net income in $2024$

$4.$ At the end of the year, Anya realized that she had used more of the glue than she had initially estimated. It turned out that the ending balance of the glue was only $$300($$$36$ less than she had estimated$).$ Assuming all else equal, how would this discovered error in the ending balance of glue change the Cost of Goods Sold?

$5.$ Anya is considering hiring a production manager while she, Anya, becomes a residual claimant and does not draw a salary. The production manager has agreed to take on the job for a fixed salary of $$40,000$ a year, plus a bonus if cost of goods manufactured per unit decreases by $$10\mathrm{.}00$ compared with the cost of goods manufactured per unit in $2024.$ Assuming the material costs per puzzle and the rent remain the same, will the new production manager earn a bonus if they produce $300$ puzzles?

$6.$ The production manager has agreed to take on the job for a fixed salary of $$40,000$ a year, plus a bonus if cost of goods manufactured per unit decreases by $$10\mathrm{.}00$ compared with the cost of goods manufactured per unit in $2024.$ Assuming the material costs per puzzle and the rent remain the same, will the new production manager earn a bonus if they produce $325$ puzzles?

$7.$ The production manager has agreed to take on the job for a fixed salary of $$40,000$ a year, plus a bonus if the variable cost of goods manufactured per unit decreases by $$10\mathrm{.}00$ compared with the variable cost of goods manufactured per unit in $2024.$ Assuming the material costs per puzzle and the rent remain the same, will the new production manager earn a bonus if they produce $300$ puzzles?

$8.$ The production manager has agreed to take on the job for a fixed salary of $$40,000$ a year plus a bonus if the variable cost of goods manufactured per unit decreases by $$10\mathrm{.}00$ compared with the variable cost of goods manufactured per unit in $2024.$ Assuming the material costs per puzzle and the rent remain the same, will the new production manager earn a bonus if they produce $325$ puzzles?

$9.$ What would happen to the COGM if the maker$-$space were to give a $$2000$ discount on rent $($reducing total rent by $$2000).($Note: assume all other costs and production levels are unchanged$)$