Financial Statements of a Manufacturing Firm The following events took place for Rushmore Biking inc. during February, the first month of operations as a producer of road bikes: Purchased $543,500 of materials. Used $467,400 of direct materials in production. Incurred $404,000 of direct labor wages. Applied factory overhead at a rate of 80% of direct labor cost. Transferred $1,146,800 of work in process to finished goods. Sold goods with a cost of $1,070,700. Revenues earned by selling bikes, $1,916,600. Incurred $460,400 of selling expenses. Incurred $171,300 of administrative expenses. Rushmore Biking Inc. Income Statement For the Month Ended February 28 Revenues 1,916,600 Cost of goods sold 1,070,700 Gross profit Selling and administrative expenses: Selling expenses 460,400 Administrative expenses 171,300 Total selling and administrative expenses Operating income Feedback b. Determine the inventory balances on February 28, the end of the first month of operations. Materials inventory, February 28 Work in process inventory, February 28 Finished goods inventory, February 28