Mutt Butter, is an emerging company that manufactures and sells peanut butter treats for dogs. Mutt Butter includes two ingredients: peanut butter, and added nutrient powder. The ratio of Peanut Butter to nutrient powder if 2:1. To make Mutt Butter, the ingredients are mixed in a food processor. Mutt Butter is packaged in 1.5 oz single-serve cups. Julia is the chef of Mutt Butter and her sole role is to make the Mutt Butter. Mutt Butter is made in a commercial kitchen that Mutt Butter rents for a contracted 25 days a year at rate of $3,750 per year. That rent includes the utilities and use of the food processor and packaging equipment. The kitchen facility will also store any packaged Mutt Butter and ingredients for free (up to 5,000 1.5 02 cups). Mutt Butter did one production run in 2015. The Ending Balance of inventory at the end of the run was as follows: Item Ending Amount Ending Balance ($) Peanut Butter 200 02- $200 Nutrient Powder $500 1.5 Oz Cups (with lids) $50 Finished Mutt Butler (in cups) 50 x 1.5 02. Servings $182 Mutt Butter in Process 150 x 1-5 oz- Servings $546 In 2016, Mutt Butter executed several production runs and sold 2,500 units (3,750 oz-) of Mutt Butter. The net revenue from the sales was $12,500. During 2016, Mutt Butter incurred the following expenses: Item Expense ($) Wages to Julia for Production $2,000 Rent for the Kitchen $3,750 Peanut Butter $3,400 Nutrient Powder $1 ,875 1.5 oz. Cups (with lids) $350 Delivery Expenses (Shipping) $500 Advertising Expenses $250 Other General and Administrative Expenses $200 The ending balance at the end of 2016 was as follows: Item Ending Amount Ending Balance ($) Peanut Butter 600 02. $600 Nutrient Powder 400 oz- $500 1.5 Oz Cups (with lids) 1,000 $100 Finished Mutt Butter (in cups) 550 x 1-5 oz- servings $2,003 Mutt Butter in Process 150 x 1-5 oz- servings $546