A manufacturing corporation has the following financial information for the year:

Inventory Balances:	Beginning	Ending
Work in Progress	$ 90,000	$ 80,000
Finished Goods	$ 77,000	$ 67,000
Raw Materials	$ 10,000	$ 10,000

During the year, the budgeted and actual costs were as follows:

	Note	Budget	Actual
Raw Materials	1	310,000	290,000
Labour	2	540,000	520,000
Depreciation Factory Equipment		72,000	72,000
Depreciation Office Equipment		24,000	24,000
Building Rent	3	100,000	100,000
Maintenance Factory Equipment		60,000	40,000
Utilities Electrical	4	200,000	180,000
Utilities - Gas	5	100,000	90,000
Utilities - Telecom	6	20,000	22,000
Sales Commissions		40,000	30,000
Advertising		30,000	20,000
Shipping	7	20,000	16,000

Sales for the year were $1,500,000 Note 1 Raw material

For both budget and actual materials: 90% of raw materials are traced directly to specific jobs and remaining 10% of raw materials are used throughout the production process and not traced. $290,000 in materials purchased in the year.

Note 2 Labour

Budget: Direct Labour $300,000 + Factory Salaries $80,000 + Head Office Salaries

$160,000 = $540,000

Actual: Direct Labour $270,000 + Factory Salaries $85,000 + Head Office Salaries

$163,000 = $518,000

Note 3 Building Rent

The building is shared between the factory and the administrative office. 68% of the building is related to the factory, and the remaining 32% is related to the administrative office.

Note 4 Utilities Electrical

90% of these costs are related to the factory, and 10% of these costs are related to the administrative office.

Note 5 Utilities - Gas

All of the Gas is used to heat production equipment.

Note 6 Utilities - Telecom

All of the Telecom costs are for sales people.

Note 7 Shipping

60% of the shipping costs are to bring raw materials to the plant. The other 40% of shipping costs are to ship finished goods to customers. (For simplicity, assume that all of the in-coming shipping costs are indirect costs and are therefore allocated to overhead.)

Note 8 Overhead

The manufacturer uses Normal Costing. Overhead is allocated based on Direct Labour costs. Any under/over applied overhead is allocated to Cost of Goods Sold.

Required (show all of your work):

1. Calculate Cost of Goods Manufactured
2. Calculate Cost of Goods Sold and an income statement
3. Provide a professional assessment and interpretation (reasonable assumptions allowed)