Mary's Mugs produces and sells various types of ceramic mugs. The business began operations on January 1, year 1, and its costs incurred during the...

On December 31, year 1, direct materials inventory consisted of 2,500 pounds of material. Production in that year was 10,000 mugs. All prices and unit variable costs remained constant during the year. Sales revenues for year 1 was $33,750. Finished goods inventory was $2,200 on December 31, year 1. Each finished mug requires 0.4 pounds of material.

Finished goods ending inventory in units on December 31, year 1

Selling price per unit

Operating profit (loss) for year 1