i am completely stuck on this!

5. Manufacturing statements and cost behavior
Tampa Foundry began operations during the current year, manufacturing various products for industrial use. One such product is light-gauge aluminum, which the company sells for $36 per roll. Cost information for the year just ended follows.
Per Unit Variable Cost Fixed Cost
Direct materials $4.50 $ —
Direct labor 6.5 —
Factory overhead 9 50,000
Selling — 70,000
Administrative — 135,000


Production and sales totaled 20,000 rolls and 17,000 rolls, respectively There is no work in process. Tampa carries its finished goods inventory at the average unit cost of production.
Instructions:
a. Determine the cost of the finished goods inventory of light-gauge aluminum.
b. Prepare an income statement for the current year ended December 31
c. On the basis of the information presented:
1. Does it appear that the company pays commissions to its sales staff? Explain.
2. What is the likely effect on the $4.50 unit cost of direct materials if next year's production increases? Why?

a. To determine the cost of the finished goods inventory of light-gauge aluminum, we need to calculate the total manufacturing cost per unit. The total manufacturing cost per unit is the sum of the variable costs (direct materials, direct labor, and factory overhead) per unit.

Variable cost per unit = Direct materials per unit + Direct labor per unit + Factory overhead per unit
= $4.50 + $6.50 + $9
= $20

Cost of finished goods inventory = Total manufacturing cost per unit * Number of units in inventory
= $20 * (20,000 – 17,000)
= $60,000

Therefore, the cost of the finished goods inventory of light-gauge aluminum is $60,000.

b. To prepare an income statement for the current year ended December 31, we need to calculate the total sales, total variable expenses, total fixed expenses, and the net income.

Sales = Selling price per unit * Number of units sold
= $36 * 17,000
= $612,000

Total variable expenses = Variable cost per unit * Number of units sold
= $20 * 17,000
= $340,000

Total fixed expenses = Fixed cost of factory overhead + Selling expenses + Administrative expenses
= $50,000 + $70,000 + $135,000
= $255,000

Net income = Sales - Total variable expenses - Total fixed expenses
= $612,000 - $340,000 - $255,000
= $17,000

Therefore, the income statement for the current year ended December 31 would look like this:

Income Statement
Sales $612,000
Variable expenses ($340,000)
Fixed expenses ($255,000)
Net Income $17,000

c.

1. Based on the information presented, it is not clear whether the company pays commissions to its sales staff. The cost of selling expenses is provided, but it does not specify whether it includes commissions or other types of expenses. Without additional information, we cannot determine if the company pays commissions to its sales staff.

2. If next year's production increases, the likely effect on the $4.50 unit cost of direct materials would depend on the nature of the cost behavior for direct materials. If direct materials costs are fixed, the unit cost of direct materials would remain the same regardless of the level of production. However, if direct materials costs are variable, the unit cost of direct materials may increase if there are economies of scale or volume discounts associated with higher levels of production. Without more information about the cost behavior of direct materials, we cannot determine the exact effect on the $4.50 unit cost.

To determine the cost of the finished goods inventory of light-gauge aluminum, you need to calculate the total cost of the 17,000 rolls that were sold.

First, let's calculate the variable cost per unit:
Variable Cost = Direct Materials + Direct Labor + Factory Overhead
Variable Cost = $4.50 + $6.50 + $9 = $20

Next, multiply the variable cost per unit by the number of rolls sold:
Cost of Goods Sold = Variable Cost per Unit x Number of Rolls Sold
Cost of Goods Sold = $20 x 17,000 = $340,000

Since the finished goods inventory is valued at the average unit cost of production, and assuming there is no beginning inventory, the cost of the finished goods inventory would be the same as the cost of goods sold, which is $340,000.

To prepare an income statement for the current year ended December 31, you need to list the various revenue and expense items.

Income Statement:
Revenue:
Sales Revenue: 17,000 rolls x $36 per roll = $612,000

Expenses:
Variable Cost: $20 per unit x 17,000 rolls = $340,000
Fixed Costs:
Factory Overhead: $50,000
Selling: $70,000
Administrative: $135,000
Total Expenses: $595,000

Net Income = Revenue - Total Expenses
Net Income = $612,000 - $595,000 = $17,000

Now let's move on to the additional questions:

1. Does it appear that the company pays commissions to its sales staff? Explain.
Based on the information provided, there is no specific mention of sales commissions. However, the Selling expense of $70,000 suggests that there may be costs associated with selling and distribution activities, which could include sales commissions. Without further information, it is not possible to determine the exact amount or percentage of sales commissions paid by the company.

2. What is the likely effect on the $4.50 unit cost of direct materials if next year's production increases? Why?
The $4.50 unit cost of direct materials represents the variable cost per unit for the current year. If next year's production increases, it is likely that the company will need to purchase a larger quantity of direct materials to meet the higher demand. This could potentially lead to economies of scale, where the company can negotiate better prices for bulk purchases of direct materials. As a result, the unit cost of direct materials may decrease. However, it's important to note that other factors such as inflation or changes in supplier prices could also influence the unit cost of direct materials.