Nebula Manufacturing Company

Income Statement

For the month ended July 31, 2015

Sales 360,000

Less: Cost of Goods Sold

Finished goods inventory, July 1 40,000

Total cost of goods manufactured 214,000

Total goods available for sale 254,000

Less: Finished goods inventory, July 31 63,000

Unadjusted cost of goods sold 191,000

Add: Underapplied overhead 10,000 201,000

Gross Margin 159,000

Less: Operating Expenses

Selling expenses 50,950

Administrative expenses 33,050 84,000

Operating Income 75,000

Less: Income tax 46,000

Net Income 29,000

 Nebula Manufacturing Company

Statement of Cost of Goods Manufactured

For the month ended July 31, 2015

Direct material used

Raw materials inventory, beginning 60,000

Add: Net raw materials purchased 124,000

Total materials available for use 184,000

Less: Raw materials inventory, end 85,000

Total raw materials used 99,000

Less: Indirect materials used 5,000 94,000

Direct labor 200,000

Factory overhead applied 180,000

Total manufacturing costs 474,000

Add: Work in Process inventory, July 1 80,000

Total goods placed into process 554,000

Less: Work in Process inventory, July 31 340,000

Total cost of Goods Manufactured 214,000