Financial Statements of a Manufacturing Firm The following events took place for Migliozzi Inc. during July, the first month of operations as a producer of road bikes: Purchased $437,600 of materials Used $376,300 of direct materials in production Incurred $324,000 of direct labor wages Applied factory overhead at a rate of 80% of direct labor cost Transferred $921,100 of work in process to finished goods Sold goods with a cost of $875,200 Sold goods for $1,565,500 Incurred $376,300 of selling expenses Incurred $140,000 of administrative expenses a. Prepare the July income statement for Migliozzi. Assume that Migliozzi uses the perpetual inventory method. Migliozzi Inc. Income Statement For the Month Ended July 31 Revenues Cost of goods sold Gross profit Seling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expanses Income from operations Feedback Check My Work a. Both product and period costs must be reported on the income statement and are necessary to measure income. b. Determine the inventory balances at the end of the first month of operations. Materials Inventory, July 31 Work in process Inventory, July 31 Finished goods inventory, July 31