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Steel Company USA is a metal fabricating business that sells products mainly to the home construction market. The data table that follows should be used in this assignment. The problems are at the end of the data table. Inputs Costs Sandpaper $4,000 Materials - handling costs $140,000 Lubricants and coolants $10,000 Misc indirect labor $80,000 Misc direct labor $600,000 Direct materials inv Jan 1, 2010 $80,000 Direct materials inv Dec 31, 2010 $100,000 Finished goods inv, Jan 1, 2010 $200,000 Finished goods inv, Dec 31, 2010 $300,000 WIP Jan 1, 2010 $20,000 WIP Dec 31, 2010 $28,000 Plant lease costs $108,000 Depreciation - PPE $72,000 Property taxes $8,000 Insurance $6,000 Direct materials purchased $920,000 Revenues $2,720,000 Marketing Promo $120,000 Marketing Salaries $200,000 Distribution costs $140,000 Customer service costs $200,000 Using the information in the table, create an income statement with a schedule for costs of goods manufactured. Make sure that for the costs you classify if they are direct or indirect and indicate if they are variable or fixed. Let's assume that both direct material costs and plant leasing costs are for the production of 1,800,000 units. What would be the direct material cost of each of these units produced? Plant leasing cost per unit? Plant leasing should be a fixed cost here. Now let's assume we build 2,000,000 units next year. Repeat the calculations in item #2 above for direct materials and plant leasing costs. Explain why the unit costs for direct materials didn't change in numbers 2 and 3, but the unit costs for the plant lease did.
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