Problem 2

Cheung Company produced 10,000 units during the past year, but only 8,500 of the units were sold. The following additional information is also available.

Direct materials used $70,000

Direct labor incurred $30,000

Variable manufacturing overhead $25,000

Fixed manufacturing overhead $40,000

Fixed selling and administrative expenses $70,000

Variable selling and administrative expenses $10,000

There was no work-in-process inventory at the beginning of the year, nor did Cheung have any beginning finished goods inventory.

Instructions

(a) What would be Cheung Company