During 2020, Rafael Corp. produced 30,000 units and sold 30,000 for $16 per unit. Suppose the accountant for Rafael Corp. uses normal costing and uses the budgeted volume of 50,000 units. Variable manufacturing costs were $7 per unit. Annual fixed manufacturing overhead was $60,000 ($3 per unit). Variable selling and administrative costs were $2 per unit sold, and fixed selling and administrative expenses were $40,000. The company expenses production volume variance to cost of goods sold in the accounting period in which it occurs.

(b) Prepare a normal-costing income statement for the first year of operation. Rafael Corp. Income Statement-Normal Costing For the Year Ended December 31, 2020 Sales $ 4800000 Cost of goods sold Beginning inventory 0 $ Add Costs of goods manufactured 360000 Cost of goods sold Add Volume variance Gross margin Less Selling and administrative expenses Operating income before tax $ $