Early in the year, John Raymond founded Raymond Engineering Co. for the purpose of manufacturing a special flow control valve that he had designed. Shortly after year-end, the company's accountant was injured in a skiing accident, and no year-end financial statements were prepared. However, the accountant had correctly determined the year-end inventories at the following amounts:

Materials$46000

Work in process31500

Finished goods (3000 units)88500

As this was the first year of operations, there were no beginning inventories.

While the accountant was in the hospital, Raymond improperly prepared the following income statement from the company's accounting records.

Net sales$610000

COGS:

Purchased direct material$181000

Direct labor cost110000

MOH 170000

Selling expenses70600

Administrative132000

Total cost663,600

Net loss for the year(53,000)

Raymond was very disappointed in these operating results. He stated, "Not only did we lose more than $50,000 this year, but look at our unit production costs. We sold 10,000 units this year at a cost of $663,600; that amounts to a cost of $66.36 per unit. I know some of our competitors are able to manufacture similar valves for about $35 per unit. I don't need an accountant to know that this business is a failure."

Required:

a.Compute the average cost per unit manufactured.

c.Compute the cost of goods sold