Exhibit 16 Flow of Manufacturing Costs MANUFACTURING COSTS Direct BALANCE INCOME SHEET STATEMENT Unused Materials Materials Inventory Used Direct Labor Manufacturing Process Unfinished Work in Process Inventory Factory Overhead Formulas Formula #2 Mats Used Purch> Finished Goods $ 163,800 $ 192,780 End> Direct Labor Cost $ 382,500 Materials Purchased in May $ 271,800 Factory Overhead Costs in May: Indirect Labor 51,480 Machinery Deprecia 32,400 Finished Goods Heat, Light, Electrici 11,700 Beg> Mfg. Supplies 9,000 From WIP> Property Taxes--Fact 8,820 End> Miscellaneous FO 16,380 Total Factory overhea All "product costs" 129,780 Sales $ 1,243,384 Selling Expenses $ 90,000 2. Mfg Costs Incurred = DM + DL + FO Administrative Expens+ $ 180,000 Tot Mfg Cost Incurred WIP May1st Formula #3 & #4 Tot Mfg Cost Incurred Tot Mfg Cost Less End WIP May 31st Cost of Goods MFG'd > From DM >> DL >> FO>> End> Work in Process Cost of Good Sold From FG> Sales