Ace manufactuing company began business in January of 2012. During the year, Ace purchased raw materials costing $200,000, incurred direct labor costs of $300,000; and paid rent of $4,000 per month for a building used to manufacture 20,000 units of product. Ace also paid a salary of $2,000 per month for a factory manager. Other employees were paid $15 per hour. Ace sold 10,000 of the units for $200 each, using a sales force paid $1,000 per month and 10% of sales.
Before the business opened, Ace expected total factory overhead costs fo $72,000 and 18,000 direct labor hours. At the end of hte year, Ace's raw material inventory, and work in progress inventory were $10,000 and $40,000, respectively. Ace applied factory overhead using direct labor hours.
a. What is the normal cost of goods manufatured? why?
b. What is the actual cost of goods manufactured? why?
c. What is variable cost per unit manufactured? why?
d. What is the fixed cost per unit sold? why?
e. What was the total product cost? why?
f. What was the total period cost? why?
g. What was the net income? why?