QUESTION 1

1. Use the following to answer questions A-D:

The following data (in thousands of dollars) have been taken from the accounting records of Karlist Corporation for the just completed year.

Sales	$800
Raw materials inventory, beginning	$ 60
Raw materials inventory, ending	$ 70
Purchases of raw materials	$180
Direct labour	$100
Manufacturing overhead	$190
Administrative expenses	$110
Selling expenses	$150
Work-in-process inventory, beginning	$ 70
Work-in-process inventory, ending	$ 80
Finished goods inventory, beginning	$120
Finished goods inventory, ending	$160

A.	What was the cost of the raw materials used in production (in thousands of dollars) during the year?

B.	What was the cost of goods manufactured (finished) for the year (in thousands of dollars)?

C.	What was the cost of goods sold (in thousands of dollars) for the year?

D.	What was the net income (in thousands of dollars) for the year?

Unified Parcel, Inc. operates a local parcel delivery service. The company keeps detailed records relating to operating costs of trucks, and has found that if a truck is driven 110,000 kilometres per year, the operating cost is 7.5 cents per kilometre. This cost increases to 8.75 cents per kilometre if a truck is driven 60,000 kilometres per year.

Required:

Estimate the cost formula for truck operating costs using the high-low method.