Blue Hen Carton Company is a manufacturing firm that uses job-order costing. The companys inventory balances were as follows at the beginning and end of the calendar year 2016.

Beginning Balance Ending Balance

Direct Materials $15,000 $6,000

Work in Process $40,000 $14,000

Finished Goods $120,000 $90,000

The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would use 20,000 machine-hours and incur $275,000 in overhead cost. The following transactions were recorded for the year.

The following transactions occurred during 2016.

1. Direct Materials purchased during 2016 cost a total of $416,000.

2. Direct Materials used in production: $425,000.

3. The following employee costs were incurred:

A. Direct Labor - $500,000

B. Indirect Labor - $95,000

C. Administrative Salaries - $157,000

4. Selling Costs Incurred for the year: $113,000

5. Factory Utility Costs Incurred for the year: $35,000

6. Indirect Materials used for the year was $55,000

7. Depreciation for the year was $132,000 of which $125,000 is related to factory operations and $7,000 is related to selling, general and administrative activities.

8. The actual machine-hours incurred for 2016 was 22,000.

9. Finished Goods Warehousing Expense was $38,000

10. Sales for the year totaled $1,606,000

Tasks for our homework:

A. Prepare a Schedule of Cost of Goods Manufactured in Good Form (Remember that means a proper heading too!)

B. Prepare an Income Statement in Good Form as well.