Mustafa Manufacturing Company began operations on January 1. During the year, it started and completed 3,000 units of product. The financial statements are prepared in accordance with GAAP. The company incurred the following costs:

Mustafa Manufacturing Company began operations on January 1. During the year, it started and completed 3,000 units of product. The financial statements are prepared in accordance with GAAP. The company incurred the following costs:
 

1. Raw materials purchased and used—$6,200.
2. Wages of production workers—$7,400.
3. Salaries of administrative and sales personnel—$3,000.
4. Depreciation on manufacturing equipment—$4,400.
5. Depreciation on administrative equipment—$2,200.

Mustafa sold 2,400 units of product.

Required

1. Determine the total product cost for the year.
2. Determine the total cost of the ending inventory.
3. Determine the total of cost of goods sold.
    
   
   
   Explanation
   a.

   Raw materials purchased and used	$	6,200
   Wages of production workers		7,400
   Depreciation on manufacturing equipment		4,400
   Total product cost	$	18,000

   
   b.
   Cost of inventory per unit = $18,000 ÷ 3,000 = $6.00
   Ending inventory in units = 3,000 − 2,400 = 600
   Cost of ending inventory = $6.00 × 600 = $3,600
   
   c.
   Cost of goods sold = $6.00 × 2,400 = $14,400