1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials.

2. Prepare a schedule of cost of goods sold. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold.

3. Prepare an income statement.

Sales	$ 657,000
Direct labor cost	$ 81,000
Raw material purchases	$ 132,000
Selling expenses	$ 107,000
Administrative expenses	$ 45,000
Manufacturing overhead applied to work in process	$ 222,000
Actual manufacturing overhead costs	$ 206,000

Inventories	Beginning	Ending
Raw materials	$ 8,100	$ 10,800
Work in process	$ 5,000	$ 20,800
Finished goods	$ 78,000	$ 25,200