1. Pearce Manufacturing Inc. incurred the following costs in February:

Direct labor	$40,000		Advertising costs	$1,000
Indirect labor	15,000		Factory rent	4,000
Administrative salaries	8,000		Indirect materials used	4,000
Factory depreciation	2,000		Raw materials purchased	10,000
Administrative rent	3,000		Sales revenue	$225,000
Administrative depreciation	1,000
In addition, the following information is also available:
	Beginning	Ending
Raw materials	2,000	4,000
Work-in-process	25,000	18,000
Finished goods	4,000	12,000
C. Calculate cost of goods manufactured.
D. Calculate cost of goods sold.
E. Prepare the Income Statement and calculate net operating income Sales Cost of Goods Sold Gross Margin Selling and Admin costs Net operating profit