Mary’s Mugs produces and sells various types of ceramic mugs. The business began operations…

Mary’s Mugs produces and sells various types of ceramic mugs. The business began operations…

Mary’s Mugs produces and sells various types of ceramic mugs. The business began operations on January 1, year 1, and its costs incurred during the year include these

Variable costs (based on mugs produced):
Direct materials cost $ 4,000
Direct manufacturing labor costs 30,820
Indirect manufacturing costs 1,000
Administration and marketing 2,260
Fixed costs:
Administration and marketing costs 12,100
Indirect manufacturing costs 4,180

On December 31, year 1, direct materials inventory consisted of 4,000 pounds of material. Production in that year was 20,000 mugs. All prices and unit variable costs remained constant during the year. Sales revenues for year 1 was $66,600. Finished goods inventory was $4,000 on December 31, year 1. Each finished mug requires 0.4 pounds of material.(Do not round intermediate calculations.)

Compute the operating profit (loss) for year 1.

Mary’s Mugs produces and sells various types of ceramic mugs. The business began operations…

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