After the knife shafts are stamped, they are brought to an assembly area where an employee attaches the handle to the shaft and packs the knife in a decorative box. The direct labor cost is $0.45 per unit.

The knives are sold to stores. Each store is given promotional materials such as posters and aisle displays. Promotional materials cost $60 per store. In addition, shipping costs average $0.15 per knife.

Total completed production was 1,200,000 units during the year. Other information is as follows:

Number of customers (stores)	58,500
Number of knives sold	1,128,000
Wholesale price (to store) per knife	$17

Factory overhead cost is applied to jobs at the rate of $650 per stamping machine hour after the knife blanks are stamped. There were an additional 28,000 stamped knives, handles, and cases waiting to be assembled on December 31, 20Y8.

Required:

1.

Prepare an annual income statement for the Kitchen Ninja knife series, including supporting calculations, from the information provided. Be sure to complete the statement heading. Refer to the list of Accounts, Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative. Expenses should be positive.*

2.

Determine the balances in the work in process and finished goods inventories for the Kitchen Ninja knife series on December 31, 20Y8.*

*In your computations, if required, round interim per-unit costs to two decimal places.