Question

Kool-Air, Inc. Income Statement August 31, 200x
Sales		$950,000
Less:
Raw materials balance @ August 1, 200x	$25,000
Wages – product assembly labor	150,000
Product painting and finishing wages	120,000
Advertising expense	90,000
Selling and administrative expenses	75,000
Rent on factory facilities	60,000
Rent on the corporate office complex	18,500
Finished Goods Inventory @ August 1, 200x	30,000
Depreciation on sales equipment	45,000
Depreciation on production equipment	30,000
Accrued liabilities	125,000
Plant security wages	10,000
Purchases of direct material during the month	225,000
Production supervisor’s salary	18,000
Factory utilities	12,000
Factory cafeteria wages	21,000
Work-in Process Inventory @ August 1, 200x	16,000
Factory insurance	8,000	1,078,500
Net Loss		($128,000)

	August 31, 200x
Raw Materials Inventory	$22,000
WIP Inventory	14,000
Finished Goods Inventory	40,000

By the way, according to Bob, the company’s manufacturingoverhead cost should be applied to production at a rate of 55% ofDirect Labor cost.

Using the additional information provided below:

1.Prepare a schedule of cost of goods manufactured for the monthending August 31, 200x.

2.Prepare a corrected income statement for the month endingAugust 31, 200x.