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:
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.