Terra Cotta Designs manufactures custom tiles. The following information relates to the fiscal year ending December 31, 2011.
Beginning balance in Raw Material Inventory.......$ 400,000
Purchases of raw material...............$ 1,000,000
Ending balance in Raw Material Inventory...........$ 200,000
Beginning balance in Work in Process...........$ 600,000
Ending balance in Work in Process............$ 350,000
Direct labor cost....................$ 2,100,000
Manufacturing overhead applied.............$ 600,000
Beginning balance in Finished Goods...........$ 700,000
Ending balance in Finished Goods............$ 350,000
Sales.........................$ 6,100,000
Selling expenses...................$ 400,000
General and administrative expenses...........$ 850,000
Required:
a. Prepare a schedule of cost of goods manufactured. Assume that there are no indirect material costs.
b. Prepare an income statement for ïscal 2011.Ignore income taxes.