Henry Company had the following activities during 2018: Beginning inventory: Direct materials 5 20,000 Work-in-process 800 Finished goods 24,000 During 2018: Purchases of direct materials 61,600 Direct manufacturing labor 16,000 Manufacturing overhead 12,000 Ending inventory: Direct materials 10,400 Workin-process 4,000 Finished goods 16,000 Required: a. What is the cost of direct materials used during 2018? (1 mark) b. What is cost of goods sold for 2018? (2 marks) c. Henry Company produces two products, Product A and Product B, and adopts a traditional overhead cost allocation policy, using direct labor hours as the cost allocation basis for its manufacturing overhead. It also adopts a pricing policy based on 120% markup on total production cost. The Sales Director asked for a performance bonus in View of signicant increase in the total number of products sold during the year. However, the nancial reports of the company showed that the protability of Henry Company dropped during the year. Explain how a topselling product may result in losses for Henry Company. (2 marks)