Octaone produces luxury water cooler. This is their first yearin operation (i.e. starting the year with $0 balances). The companyproduced 9,000 units (started and completed) and sold 8,000 unitsfor $560,000. Octaone paid $10 per unit in direct materials and $5per unit in wages for production workers. Lease payments andutilities on the production facilities amounted to $22,500 andselling & administrative expenses were $17,000.
Answer the following questions about Octaone.
A. What is the cost per unit of a water cooler?
B. What is the gross margin per unit of a water cooler?
C. What is the balance in the inventory account before any watercoolers were sold?
D. What is the cost of goods sold for the year?
E. What is the cost of inventory on the balance sheet at the endof the year?
F. What is the net income for the year?
Label and place your final answer for A-F at the top of theanswer box. Then after the answer to F, label and show your workfor each part of the question. Just show me numbers – that isusually enough for me to follow your logic.
