Mutt Butter, is an emerging company that manufactures and sells peanut butter treats for dogs. Mutt Butter includes two ingredients: peanut butter,…

Mutt Butter, is an emerging company that manufactures and sells peanut butter treats fordogs. Mutt Butter includes two ingredients: peanut butter, and added nutrient powder.The ratio of Peanut Butter to nutrient powder if 2:1. To make Mutt Butter, the ingredientsare mixed in a food processor. Mutt Butter is packaged in 1.5 oz single-serve cups. Juliais the chef of Mutt Butter and her sole role is to make the Mutt Butter. Mutt Butter is madein a commercial kitchen that Mutt Butter rents for a contracted 25 days a year at rate of$3,750 per year. That rent includes the utilities and use of the food processor andpackaging equipment. The kitchen facility will also store any packaged Mutt Butter andingredients for free (up to 5,000 1.5 02 cups). Mutt Butter did one production run in 2015. The Ending Balance of inventory at the end of the run was as follows:— Item Ending Amount Ending Balance ($)Peanut Butter 200 02- $200Nutrient Powder $5001.5 Oz Cups (with lids) $50Finished Mutt Butler (in cups) 50 x 1.5 02. Servings $182 Mutt Butter in Process 150 x 1-5 oz- Servings $546 In 2016, Mutt Butter executed several production runs and sold 2,500 units (3,750 oz-) ofMutt Butter. The net revenue from the sales was $12,500. During 2016, Mutt Butterincurred the following expenses: Item Expense ($)Wages to Julia for Production $2,000Rent for the Kitchen $3,750Peanut Butter $3,400Nutrient Powder $1 ,8751.5 oz. Cups (with lids) $350Delivery Expenses (Shipping) $500Advertising Expenses $250 Other General and Administrative Expenses $200 The ending balance at the end of 2016 was as follows: Item Ending Amount Ending Balance ($)Peanut Butter 600 02. $600Nutrient Powder 400 oz- $500 1.5 Oz Cups (with lids) 1,000 $100Finished Mutt Butter (in cups) 550 x 1-5 oz- servings $2,003 Mutt Butter in Process 150 x 1-5 oz- servings $546

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