Hermon Company, a manufacturing company, produces a single product. The following
information has been taken from the company's production, sales, and cost records for the
just completed year.
Hermon Company
Production in units	29,000
Sales in units	?
Ending finished goods inventory in units	?
Sales in dollars	$1,300,000
Costs:
Advertising	$105,000
Entertainment and travel	$40,000
Direct labor	$90,000
Indirect labor	$85,000
Raw materials purchased	$480,000
Building rent (production uses 80% of the space;
administrative and sales offices use the rest)	$40,000
Utilities, factory	$108,000
Royalty paid for use of production patent, $1.50
per unit produced	?
Maintenance, factory	$9,000
Rent for special production equipment, $7,000 per
year plus $0.30 per unit produced	?
Selling and administrative salaries	$210,000
Other factory overhead costs	$6,800
Other selling and administrative expenses	$17,000
Inventories:	Beginning	End of
	of the Year	theYear
Raw materials	$20,000	$30,000
Work in process	$50,000	$40,000
Finished goods	$0	?
The finished goods inventory is being carried at the average unit production cost for the year.
The selling price is $50 per unit.
Required: Use the P3 Solution Sheet
1. Prepare a schedule of cost of goods manufactured for the year.
2. Compute the following:
a. The number of units in the finished goods inventory at the end of the year.
b. The cost of the units in the finished goods inventory at the end of the year.
3. Prepare an income statement for the year.	show all work