3. value: 10.00 points Swift Company was organized on March 1 of the current year. After five months of startup losses, management had expected to earn a profit during August, the most recent month. Management was disappointed, however, when the income statement for August also showed a loss. August's income statement follows: $ 495,000 SWIFT COMPANY Income Statement For the Month Ended August 31 Sales Less: Operating expenses: Indirect labour cost $ 14,700 Utilities 16,000 Direct labour cost 61,000 Depreciation, factory equipment 24,000 Raw materials purchased 192,000 Depreciation, sales equipment 18,000 Insurance 3,600 Rent on facilities 48,000 Selling and administrative salaries 41,000 Advertising 86,700 505,000 Net loss $ (10,000) The company's controller resigned a month ago. Sam, a new assistant in the controller's office, prepared The company's controller resigned a month ago. Sam, a new assistant in the controller's office, prepa the income statement above. Sam has had little experience in manufacturing operations. After seeing $10,000 loss for August, Swift's president stated, "I was sure we'd be profitable within six months, but six months are up and this loss for August is even worse than July's. I think it's time to start looking someone to buy out the company's assets-if we don't, within a few months there won't be any assets sell. By the way, I don't see any reason to look for a new controller. We'll just limp along with Sam for time being." Additional information about the company follows: a. Some 70% of the utilities cost and 70% of the insurance apply to factory operations. The remaini amounts apply to selling and administrative activities. b. Inventory balances at the beginning and end of August were as follows: Raw materials Work in process Finished goods August 1 $ 25,000 8,000 48,000 August 31 $ 22,000 23,000 53.000 c. Only 75% of the rent on facilities applies to factory operations; the remainder applies to selling an administrative activities. The president has asked you to check over the income statement and make a recommendation abou whether the company should look for a buyer for its assets. Required: 1. As one step in gathering data for a recommendation to the president, prepare a schedule of costo goods manufactured in good form for August. SWIFT COMPANY Schedule of Cost of Goods Manufactured For the Month Ended August 31 Direct materials: Raw materials available for use 0 Raw materials used in production Manufacturing overhead: Total overhead costs Total manufacturing costs Cost of goods manufactured Type here to search o De 2. As a second step, prepare a new income statement for August SWIFT COMPANY Income Statement For the Month Ended August 31 Less cost of goods sold: Goods available for sale Less operating expenses: Type here to search O EL