Problem 3 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 uni Ending finished goods inventory in units Sales in dollars $1,300,000 Costs $105,000 Advertising 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 $210,000 Selling and administrative salaries Other factory overhead costs $6,800 Other selling and administrative expenses $17,000 Beginning End of nventories: of the Year the Yea $20,000 $30,000 Raw materials 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