W. W. Phillips Company produced 4,000 leather recliners during the year. These recliners sell for $400 each. Phillips had 500 recliners in finished goods inventory at the beginning of the year. At the end of the year, there were 700 recliners in finished goods inventory. Phillips’ accounting records provide the following information:

Purchases of raw materials ..............$320,000

Beginning materials inventory ...............46,800

Ending materials inventory ..............66,800

Direct labor .....................200,000

Indirect labor ....................40,000

Rent, factory building ................42,000

Depreciation, factory equipment ............60,000

Utilities, factory ...................11,900

Salary, sales supervisor .................90,000

Commissions, salespersons ...............180,000

General administration ................300,000

Beginning work-in-process inventory ..........13,040

Ending work-in-process inventory ............14,940

Beginning finished goods inventory ............80,000

Ending finished goods inventory ............114,100

Required:

1. Prepare a statement of cost of goods manufactured.

2. Compute the average cost of producing one unit of product in the year.

3. Prepare an income statement for external users.