Laworld, Inc. manufactures small camping tents. Last year 200,000 tents were made and sold for $60 each. The actual unit cost for a tent follows: lop25

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Direct materials $18.00 Direct labor 12.00 Overhead 16.00 Total unit cost $46.00 The only selling expenses were a commission of $2 per unit sold and advertising to- taling $100,000. Administrative expenses, all fixed, equaled $300,000. There were no beginning or ending finished goods inventories. There were no beginning or end- ing work-in-process inventories. Required: 1. Prepare an income statement for external users. Did you need to prepare a sup- porting statement of cost of goods manufactured? Explain. 2. Suppose that there were 200,000 tents produced (and 200,000 sold) but that the company had a beginning finished goods inventory of 10,000 tents produced in the prior year at $40 per unit. The company follows a first-in, first-out policy for its inventory (meaning that the units produced first are sold first for purposes of cost flow). What effect does this have on the income statement? Show the new statement.