The following information pertains to the most recent quarter at Mega Products Limited: Advertising expenses Depreciation (80% factory; 20% administrative) Finished goods inventory, beginning Finished goods inventory, ending General administrative expenses Insurance (70% factory; 30% administrative) Labour (75% direct; 25% indirect) Marketing expenses Raw materials inventory, beginning Raw materials inventory, ending Raw materials purchases Sales Utilities (70% factory; 30% administrative) Work in process inventory, beginning Work in process inventory, ending 125,000 120,000 84,000 78,000 140,000 60,000 300,000 175,000 25,000 40,000 400,000 1,600,000 90,000 48,000 62,000 Of the raw materials used for production, $10,000 were indirect materials. REQUIRED: 1. Prepare a schedule of cost of goods manufactured (10 marks). MEGA PRODUCTS LIMITED SCHEDULE OF COST OF GOODS MANUFACTURED QUARTER ENDED .... Direct Materials Raw materials inventory, beginning Raw materials purchases Raw materials available for production Raw materials inventory, ending Raw materials used for production Indirect materials Direct Materials Direct labour Manufacturing overhead Total manufacturing overhead Total manufacturing costs Work in process inventory, beginning Total WIP Work in process inventory, ending Cost of goods manufactured 2. Prepare an income statement. The income tax rate is 20% (8 marks). MEGA PRODUCTS LIMITED INCOME STATEMENT QUARTER ENDED .... Sales Finished goods inventory, beginning Cost of goods manufactured Cost of goods available for sale Finished goods inventory, ending Cost of goods sold Gross margin Operating expenses Total operating expenses Operating income Income tax expense Net income 3. Assume that the company produced the equivalent of 10,000 units of product during the year. What was the average cost per unit for direct materials? What was the average cost per unit for factory insurance? (2 marks) 4. If depreciation is a fixed cost, what is the cost of factory depreciation that you expect will be incurred in the next quarter, when 11,000 units will be produced? (1 mark)