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Early in the year Jhon Raymond founded Raymond enineering Co. for the purpose of manufacturing a special flow control valve that he had designed. shortly after year ended the company's accountant was injured in a skiing accident and no year end financial statements were pre prepared. however, the accountant had correctly determined the year end inventories at the following amounts materials 46,000 work in process 31,500 finished goods (3,000) units 88,500 as t6his was the first year of operations there were no begining inventories while the accountant was in the hospital. Raymond improperly prepared the following income statement from the company's accounting records net sales 610,600 cost of goods sold purchases of direct materias 181,000 direct labor costs 110,000 manufactiring overhead 170,000 selling expenses 70,000 addministrative expenses 132,000 total costs 663,600 net loss for the year 53,000 Raymmond was very disapponted in these operating results. he stated not only did we lose more than 50,00 this year but look at our unit prodution costs. we sold 10,000 units this year at a cost of 663,600 that amounts to a cost of 66.36 pe unit. I dont need an accountant to know thiss business is a failure instructions a. prepare a schedule of the cosst of finished goods manufactured for the year. ( as there wee no begining inventories your schedules will start with manufacturing costs assigned to prroduction) show a supporting computation of the cost of direct materials used during the year b. compute the average cost per unit manufactured c. prepare a corrected income statement for the year using the multiple step format. if the company has earned any operatingg income assume an income tax rate of 30 percent (omit earnings per share figures) d. explain wether you agree or disagree with Raymond's remarks that the business is unprofitaable and that the nit cosy of production ( 66.36 according to raymond) is much higher than that of competitors ( around 35) if you disagree with Raymond explain any errors or shortcomings in his analysis

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