Direct Material, Beg.

40,000
Add: Purchased Direct Material 460,000
Material Handling Cost 70,000
Cost of Direct Material available to use 570,000
Less: Direct Material, Ending (50,000)
Direct Material Used 520,000
Direct Manufacturing Labor 300,000

Manufacturing Overhead
Miscellaneous Indirect Manufacturing Labor 40,000
Lubricants and Coolants 5,000
Sand paper 2,000
Depreciation of Factory Equipment 36,000
Property Tax of Factory Equipment 4,000
Fire Insurance on factory equipment 3,000
Total Manufacturing Overhead 90,000
Manufacturing cost incurred during January 910,000

Add: Opening Work in Progress 10,000

920,000
Less: Closing Work in Progress (14,000)
Cost of Goods Manufactured 906,000
Income Statement

Revenue 2,420,000
Finished Goods, Beg. 100,000
Cost of Goods Manufactured 906,000
Cost of Goods Available to sold 1,006,000
Less: Finished Goods, Ending (150,000)
Cost of Goods Sold (856,000)
Gross Margin 1,564,000

Less: Operating Cost

Factory Renting Cost 54,000
Marketing Promotion 60,000
Marketing Salary 100,000
Distribution Cost 70,000
Customer Service Cost 100,000
Total Operating Cost (384,000)
Operating Income 1,180,000