Salinas Office Equipment manufactures and sells metal shelving. It began operations on January 1, 2007. Costs incurred for 2007 are as follows (V stands for variable: F stands for fixed):

  Direct materials used

 150,000 V

   Direct manufacturing labor-costs

 30,000 V

   Plant energy costs

 10,000 F

   Indirect manufacturing-labor costs

 15,000 V

   Indirect manufacturing-labor costs

 16,000 F

   Other indirect manufacturing costs

 8,000 V

   Other indirect manufacturing costs

 24,000 F

 Marketing, distribution, and customer-servic

 122,850 V

Marketing, distribution, and customer-servic

 40,000 F

 Administrative costs

 50,000 F

  

Variable manufacturing costs are variable with respect to units produced. Variable marketing, distribution, and customer-service costs are variable with respect to units sold:

 Inventory data are:

                     Beginning  January 1, 2007 

Direct Materials -  0lb

Work in Progress - 0units

Finished Goods - 0units

                    Ending December 31, 2007

Direct Materials - 2000lbs

Work in Progress - 0units

Finished Goods - ?units

Production in 2007 was 100,000 units. Two pounds of direct materials are used to make one unit of finished product.

Revenues in 2007 were P436,800. The selling price per unit and the purchase price per pound of direct materials were stable throughout the year. The company's ending inventory of finished goods is carried at the average unit manufacturing costs for 2007. Finished-goods inventory at December 31, 2007, was P20,970.

Calculate direct materials inventory, total cost, December 31, 2007. 

Calculate finished-goods inventory, total units, December 31, 2007. 

Calculate selling price in 2007. 

Calculate operating income for 2007.