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Various cost and sales data for Medco Inc. are given for the just-completed year: Purchases of raw materials $ 174,500 Raw materials inventory, beginning 17,600

Various cost and sales data for Medco Inc. are given for the just-completed year:

Purchases of raw materials $ 174,500
Raw materials inventory, beginning 17,600
Raw materials inventory, ending 26,500
Depreciation, factory 86,400
Insurance, factory 6,900
Direct labor 73,300
Maintenance, factory 37,600
Administrative expenses 85,200
Sales 739,000
Utilities, factory 36,500
Supplies, factory 1,190
Selling expenses 97,100
Indirect labor 78,300
Work in process inventory, beginning 7,950
Work in process inventory, ending 33,800
Finished goods inventory, beginning 12,850
Finished goods inventory, ending 51,400

1) Assume that the company expects to produce 24,000 units of product during the coming year. What average cost per unit and what total cost would you expect the company to incur for direct materials at this level of activity? For factory depreciation? (In preparing your answer, assume that direct materials is a variable cost and that depreciation is a fixed cost; also assume that depreciation is computed on a straight-line basis.)

The average cost per unit Total cost
Direct Materials
Depreciation $3.60 $86,400

2) Assuming the information given in the problem relates to the production of 30,000 fully and partially finished units during the year and that 6,000 of those units remain unsold, determine the cost components of the finished goods inventory.

Direct Materials
Direct Labor
Manufacturing overhead
Total

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