Located in Toronto, Sadelmager Design Ltd is a small boutique that manufactures and sells leather products built to last a lifetime. The company is dedicated in creating luxury leather goods ranging from belts to bags. During December 2020, the busiest month of the year, the company incurred the following costs:

Materials used in production

129,955

Labour costs of production-line workers

$51,275

Production factory, rent

44,450

Sales commissions

29,220

Company showroom, rent

25,200

Small tools used in factory

24,900

Property taxes, production factory

19,730

Shipping costs

18,500

Marketing expense

$15,610

Property taxes, company showroom

10,395

Company showroom, insurance

1,350

Company showroom, utilities

875

The finished goods inventory was $91,880 on December 1, 2020 and $101,290 on December 31, 2020. The raw material inventory was $21,600 on December 1, 2020 and $33,775 on December 31, 2020. The work-in-process was $32,980 on December 1, 2020 and $37,850 on December 31, 2020.

Instructions

(a) Compute costs of goods manufactured for Sadelmagers busiest month of the year, December 2020. (5.5 marks)

(b) Prepare an income statement through gross profit for the month of December 2020, assume sales of $481,000. (4 marks)

(c) Indicate Sadelmager Design Ltd. balance sheet presentation of the inventories at December 31, 2020. (2.5 marks)