GALLUP ENTERPRISES Income Statement For the Month Ended August 31 Sales Less: Operating expenses: $1,348,400 Indirect labour cost Utilities Direct labour cost Raw materials purchased Depreciation, sales equipment Insurance $ 28,000 66,000 175,000 Depreciation, factory equipment 50,000 588,000 26,000 41,000 Rent on facilities 205,000 Selling and administrative salaries Advertising 56,000 139,000 1,374,000 Net loss $ (-28,000) The company's controller resigned a month ago. Hilda, a new assistant in the controller's office, prepared the income statement above Hilda has had little experience in manufacturing operations. After seeing the $28,000 loss for August, Gallup's president stated, "I was sure we'd be profitable within six months, but our six months are up and this loss for August is even worse than July's. I think it's time to start looking for someone to buy out the company's assets-if we don't, within a few months there won't be any assets to sell. By the way, I don't see any reason to look for a new controller. We'll just limp along with Sam for the time being." Additional information about the company follows: a. Approximately 70% of the utilities cost and 40% of the insurance apply to factory operations. The remaining amounts apply to selling and administrative activities. b. Inventory balances at the beginning and end of August were as follows: August 31 $129,000 50,000 Raw materials Work-in-process Finished goods August 1 $75,000 41,000 73,000 80,000 c. Only 60% of the rent on facilities applies to factory operations; the remainder applies to selling and administrative activities. The president has asked you to check over the income statement and make a recommendation about whether the company should look for a buyer for its assets. Required: 1. As one step in gathering data for a recommendation to the president, prepare a schedule of cost of goods manufactured in good form for August.