Question
Issa Manufacturing Company was started on January 1, 2014, when it acquired $81,000 cash by issuing common stock. Issa immediately purchased office furniture and manufacturing
Issa Manufacturing Company was started on January 1, 2014, when it acquired $81,000 cash by issuing common stock. Issa immediately purchased office furniture and manufacturing equipment costing $9,500 and $27,000, respectively. The office furniture had a seven-year useful life and a zero salvage value. The manufacturing equipment had a $3,900 salvage value and an expected useful life of three years. The company paid $11,900 for salaries of administrative personnel and $15,500 for wages to production personnel. Finally, the company paid $15,200 for raw materials that were used to make inventory. All inventory was started and completed during the year. Issa completed production on 4,800 units of product and sold 3,890 units at a price of $15 each in 2014. (Assume that all transactions are cash transaction
Determine the total product cost and the average cost per unit of the inventory produced in 2014.
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