A B C GINOCERA INC. Income Statement For the Year Ended December 31, 20Y8 Sales Cost of goods sold Gross proft Selling expenses: //11 s 3,600,000 2,000,000 224,000 Promotional materials Infomercial campaign Shipping expenses Total selling expenses 5,824,000 Administrative expenses: 800,000 Legal expenses Total operating expenses Income from operations Cost of goods sold supporting calculation: Manufacturing cost per unit (knife): Direct materials: Hardened steel blanks Wood (for handle) Packaging Total direct materials 4.00 1.50 0.50 6.00 Direct labor Factory overhead Total manufacturing cost per knife x Number of units sold Cost of goods sold 3.20 Finished goods inventory balance, December 31, 20Y8: Units produced Less: Units sold Units remaining in inventory x Manufacturing cost per unit Balance 1,200,000 1,120,000 80,000 Work in process inventory balance, December 31, 20Y8 25,000 Additional units waiting for assembly x Direct materiais and overhead per unit Balance alaices tor each of the inventory accot PR 19-5A Flow of costs and income statement OBJ. 2 nocera Inc. is a designer, manufacturer, and distributor of low-cost, high-quality stainless d for steel kitchen knives. A new kitchen knife series called the Kitchen Ninja was release production in early 20Y8. In January, the company spent $600,000 to develop a lat0 advertising infomercial for the new product. During 20Y8, the company spent advertising the product through these infomercials. In addition, the company incu $800,000 in legal costs. The knives were ready for manufacture on January 1, 2 rred 0Y8. Ginocera uses a job order cost system to accumulate costs associated with the kitchen knife. The unit direct materials cost for the knife is as follows: Hardened steel blanks (used for knife shaft and blade) $4.00 1.50 Wood (for handle) Packaging 0.50 er 19 Job Order Costing The production process is straightforward. First, the hardened steel bla are purchased directly from a raw material supplier, are stamped into a sinol, which metal that includes both the blade and the shaft. The stamping machine rpiece of hour per 250 knives. nks, requires one After the knife shafts are stamped, they are brought to an assembly area employee attaches the handle to the shaft and packs the knife in a decorativ where an direct labor cost is $0.50 per unit. The knives are sold to stores. Each store is given promotional materials su ers and aisle displays. Promotional materials cost $60.00 per store. In additio costs average $0.20 per knife. during the year. Other information Total completed production was 1,200,000 units is as follows: Number of customers (stores) Number of knives sold Wholesale price (to store) per knife 60,000 1,120,000 $16 Factory overhead cost is applied to jobs at the rate of $800 per stamping machine hour after the knife blanks are stamped. There were an additional 25,000 stamped knives, handles, and cases waiting to be assembled on December 31, 20Y8 Instructions 1. Prepare an annual income statement for the Kitchen Ninja knife series, including sup- porting calculations, from the information provided. 2. Determine the balances in the work in process and finished goods inventories for the Kitchen Ninja knife series on December 31, 20Y8