Preparation of Income Statement: Manufacturing Firm Laworld Inc. m...

Preparation of Income Statement: Manufacturing Firm
Laworld Inc. manufactures small camping tents. Last year, 200,000 tents were made and sold for $60 each. Each tent includes the following costs:
Direct materials      $18
Direct labor             12
Manufacturing overhead      16
The only selling expenses were a commission of $2 per unit sold and advertising totaling $100,000. Administrative expenses, all fixed, equaled $300,000. There were no beginning or ending finished goods inventories. There were no beginning or ending work-in-process inventories.
Required:
1. Calculate the product cost for one tent.
$
Calculate the total product cost for last year.
$      per tent

2. Conceptual Connection: Prepare an income statement for external users.
Laworld Inc.
Income Statement
For Last Year

Did you need to prepare a supporting statement of cost of goods manufactured?
Explain.

3. Conceptual Connection: Suppose 200,000 tents were produced (and 200,000 sold) but that the company had a beginning finished goods inventory of 10,000 tents produced in the prior year at $40 per unit. The company follows a first-in, first-out policy for its inventory (meaning that the units produced first are sold first for purposes of cost flow). What effect does this have on the income statement?