Financial Statements of a Manufacturing Firm The following events took place for Kirchhoff Inc. during April 2014, the first month of operations as a producer of road bikes: Purchased $320,000 of materials. Used $275,000 of direct materials in production. Incurred $236,250 of direct labor wages. Applied factory overhead at a rate of 80% of direct labor cost. Transferred $670,000 of work in process to finished goods. Sold goods with a cost of $635,000. Sold goods for $1,125,000. Incurred $275,000 of selling expenses. Incurred $100,000 of administrative expenses. Hide Hint(s) a. Prepare the April income statement for Kirchhoff. Assume that Kirchhoff uses the perpetual inventory method. Kirchhoff Inc. Income Statement For the Month Ended April 30, 2014 Cost of Goods Sold $ 635000 $ $ $ 1125000 Hide Feedback Incorrect Check My Work Feedback a. Both product and period costs must be reported on the income statement and are necessary to measure net operating income. Learning Objective 2. b. Determine the inventory balances at the end of the first month of operations. Materials inventory, April 30 $ Work in process inventory, April 30 $ Finished goods inventory, April 30 $