=+Gumwood Ltd is a metal- and woodcutting manufacturer, selling products to the home construction market. Consider the following data for 2014:

Sandpaper $2 000 Materials handling costs 70 000 Lubricants and coolants 5 000 Miscellaneous indirect manufacturing labour 40 000 Direct manufacturing labour 300 000 Direct materials inventory 1 January 2014 40 000 Direct materials inventory 31 December 2014 50 000 Finished goods inventory 1 January 2014 100 000 Finished goods inventory 31 December 2014 150 000 Work-in-process inventory 1 January 2014 10 000 Work-in-process inventory 31 December 2014 14 000 Plant leasing costs 54 000 Depreciation—plant equipment 36 000 Property taxes on plant equipment 4 000 Fire insurance on plant equipment 3 000 Direct materials purchased 460 000 Revenues 1 360 000 Marketing promotions 60 000 Marketing salaries 100 000 Distribution costs 70 000 Customer service costs 100 000 Required 1 Prepare an income statement with a separate supporting schedule of cost of goods manufactured.

For all manufacturing items, classify costs as direct costs or indirect costs and indicate by V or F whether each is basically a variable cost or a fixed cost (when the cost object is a product unit).

If in doubt, decide on the basis of whether the total cost will change substantially over a wide range of units produced.