QUESTION 5 Partally correct Mark 1400 out of 32.00 P Flag question Total Manufacturing Cost, Income Statement, Unit Cost, and Selling Price Two inventors, recently organized as Innovation, Inc., consult you regarding a planned new product.They have estimates of the costs of materials, labor, overhead, and other expenses for 2016 but need to know how much to charge for each unit to earn a profit in 2016 equal to 15% of their estimated total long-term investment of $400.000 (ignore income taxes) Their plans indicate that each unit of the new product requires the following: Direct Material 4 lb. of a material costing $5 per lb. Direct labor 2hrs. of a metal former's time at $11 per hr. 0.6 hr. of an assembler's time at $8 per hr. Major items of production overhead would be annual rent of $46,460 for a factory building $28,660 rent for machinery, and $21,700 of indirect material. Other production overhead is estimated to be $233,280. Selling expenses are an estimated 30% of total sales, and non-factory administrative expenses are 20% of total sales. The consensus at Innovation is that during 2016 10,000 units of product should be produced for selling and another 2.000 units should be produced for the next year's beginning inventory. Also, an extra 3,000 pounds of material will be purchased as beginning inventory for the next year Because of the nature of the manufacturing process, all units started must be completed, so work in process inventories are negligible. Required a. Incorporate the above data into a schedule of estimated total manufacturing costs and compute the unit production cost for 2016 Do not use negative signs with any of your answers. a. Incorporate the above data into a schedule of estimated total manufacturing costs and compute the unit production cost for 2016. Do not use negative signs with any of your answers. Estimated Total Manufacturing Cost For the Year Ended December 31, 2016 Direct material: Beginning materials inventory Cost of materials purchased 743,083 X Cost of material available 743,083 X | Ending materials inventory Less: Total materials used 891,700 X Less: Ending materials Inventory x Direct materials used Direct labor 264,000 x Manufacturing overhead 21,700 46,460 28,660 Indirect material Building rent Machinery rent 233,280 Other factory overhead Direct labor 264,000 x Manufacturing overhead Indirect material 21,700 Building rent 46,460 Machinery rent 28,660 Other factory overhead 233,280 Total manufacturing overhead $ 891,700 x Total manufacturing costs Round answer to two decimal places Product cost per unit 74 X b. Prepare an estimated income statement that would provide the target amount of profit for 2016. Income Statement For the Year Ended December 31, 2016 Sales s 1,606,167x 743,083X Cost of goods sold Gross profit on sales Operating expenses: 481,850 Round answer to two decimal places. Product cost per unit 74 X b. Prepare an estimated income statement that would provide the target amount of profit for 2016. Income Statement For the Year Ended December 31, 2016 Sales s 1,606,167x Cost of goods sold Gross profit on sales Operating expenses: Selling expenses v 743,083 X 481,850 481,850 Administrative expenses / 321,233X 803,083 X Net income 0,000 C. What unit sales price should Innovation charge for the new product? 160.62x Try another question like this one