Grip 6, is an emerging company that manufactures and sells belts. Ghary is the only employee of Grip 6 and his sole role is to make the belts. The belts include two parts: the belt buckle, and the belt strap. To make a belt, the buckle is machined from metal, and then the belt strap is cut to length out of webbing. A completed belt is packaged in single-belt box (i.e. the Packaging Boxes are part of the manufacturing costs).

The belts are made in a warehouse that includes the necessary equipment to machine the belt buckles and cut the belt strap for $15,500 per year. That rent includes the utilities and use of the equipment. The warehouse will also store any materials for no additional charge.

Ghary did one production run in 2015. The Ending Balance of inventory at the end of the run was as follows:

Item

Ending Amount

Ending Balance ($)

Metal

200 oz.

$50

Webbing

400 ft

$800

Packaging Boxes

500

$250

Belts in Process

150

$2,250

Finished Belts (in boxes)

50

$1,250

In 2016, Ghary worked diligently to produce 3,050 additional belts and sold 2,500 belts. The revenue from the sales was $87,500. During 2016, Grip 6 incurred the following expenses:

Item

Expense ($)

Wages to Ghary for Production

$45,000

Rent for the Warehouse

$15,500

Metal

$7,775

Webbing

$12,200

Packaging Boxes

$1,375

Other General and Administrative Expenses

$2500

Delivery Expenses (Shipping)

$1000

Advertising Expenses

$1000

The ending balance at the end of 2016 was as follows:

Item

Ending Amount

Ending Balance ($)

Metal

800 oz.

$200

Webbing

400 ft

$800

Packaging

200

$100

Belts in Process

150

$3,750

Finished Belts (in boxes)

600

$15,678

Please answer the following questions ignoring taxes and assuming that Grip 6 uses Full Absorption costing unless specified otherwise:

What is the total Cost of Goods Manufactured in 2016?

What is the total Cost of Goods Sold in 2016?

What is the Net Income for Grip6 in 2016?(Note: ignore taxes)