January February March

Beginning inventory, raw material $ 0 $20,000 $10,000

Ending inventory, raw material 20,000 E 30,000

Purchases of raw material 90,000 85,000 J

Direct material Used in Production A 95,000 50,000

Direct labor 200,000 F 125,000

Manufacturing overhead B 150,000 160,000

Total manufacturing costs 520,000 345,000 K

Beginning inventory, work in process 0 30,000 35,000

Ending inventory, work in process 30,000 35,000 15,000

Cost of goods manufactured 490,000 G L

Beginning inventory, finished goods 0 22,000 40,000

Ending inventory, finished goods C 40,000 M

Cost of goods sold 468,000 H 360,000

Sales 800,000 500,000 480,000

Gross margin D 178,000 120,000

Selling and administrative expenses 105,000 I 65,000

Net Income 227,000 103,000 N