62. (Product and period costs, CGM and CGS) At the beginning of August 2001, Brennan Corporation had the following account balances:

Raw Materials Inventory (both direct and indirect) $ 8,000 Work in Process Inventory 13,000 Finished Goods Inventory 5,000 During August, the following transactions took place.

1. Raw materials were purchased on account, $75,000.

2. Direct materials ($21,200) and indirect materials ($2,500) were issued to production.

3. Factory payroll consisted of $50,000 for direct labor employees and $7,000 for indirect labor employees.

4. Office salaries totaled $21,100 for the month.

5. Utilities of $8,700 were accrued; 70 percent of the utilities cost is for the factory area.

6. Depreciation of $9,000 was recorded on plant assets; 80 percent of the depreciation is related to factory machinery and equipment.

7. Rent of $12,000 was paid on the building. The factory occupies 60 percent of the building.

8. At the end of August, the Work in Process Inventory balance was $8,300.

9. At the end of August, the balance in Finished Goods Inventory was $8,900.

Brennan uses an actual cost system and debits actual overhead costs incurred to Work in Process.

a. Determine the total amount of product cost (cost of goods manufactured)

and period cost incurred during August 2001.

b. Compute the cost of goods sold for August 2001.

c. What level of August sales would have generated net income of $27,700?