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Cost and sales information for the most recent fiscal year are shown below:

WALLACE RIVER COMPANY
Cost and Sales Information
For the Year Ended December 31
Purchases of raw materials	$	90,000
Raw materials inventory, beginning		10,000
Raw materials, ending		17,000
Depreciation, factory		42,000
Insurance, factory		5,000
Direct labour		60,000
Maintenance, factory		30,000
Administrative expense		70,000
Sales		450,000
Utilities, factory		27,000
Supplies, factory		1,000
Selling expense		80,000
Advertising expense		20,000
Indirect labour, factory		65,000
Work in process inventory, beginning		7,000
Work in process inventory, ending		30,000
Finished goods inventory, beginning		10,000
Finished goods inventory, ending		40,000

Required:

1. Prepare a schedule of cost of goods manufactured.

2. Prepare an income statement.

3. Assume that the company produced 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 depreciation? (Round your answers to 2 decimal places.)

4. Assume that the company expects to produce and sell 15,000 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 and for factory depreciation at this level of activity? Assume that raw materials costs charged by suppliers will not change next year. For factory depreciation, assume that the company uses straight-line depreciation and that the factory equipment has five years of useful life remaining. (Round your answers to 2 decimal places.)

5. This part of the question is not part of your Connect assignment.

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