Sponge Manufacturing Began Business at the Start of the Current

Essay

Sponge Manufacturing began business at the start of the current year and maintains its accounting records on an absorption-cost basis. The following selected information appeared on the company's income statement and end-of-year balance sheet: $\begin{array} { | l | r | } \hline { \text { Income-statement data: } } \\\hline \text { Sales revenues (35.000 units } \times \$ 22 ) & \$ 770,000 \\\hline \text { Gross margin } & 210,000 \\\hline \text { Total sales and administrative expenses } & 160,000 \\\hline \text { Balance-sheet data: } & \\\hline \text { Ending finished-goods inventory } ( 12,000 \text { units) }& 192,000 \\\hline\end{array}$ Sponge achieved its planned production level for the year. The company's fixed manufacturing overhead totalled $141,000, and the firm paid a 10% commission based on gross sales dollars to its sales force.
Required:
A. How many units did Sponge plan to produce during the year?
B. How much fixed manufacturing overhead did the company apply to each unit produced?
C. Compute Sponge's cost of goods sold.
D. How much variable cost did the company attach to each unit manufactured?