Mary spent the month of December talking to various suppliers in order to determine her cost structure.  She added cost data to the information provided in Table 1.

Mary’s Batter Inc. opened for business on January 1, 2016, as planned.  During the month of January, the business purchased and used:  these supplies ALL came from ONE supplier

200 pounds of flour

            200 pounds of sugar

            67 dozen eggs

            20 baking soda boxes

            200 pounds of butter

            100 pounds of raspberries

            50 bottles of rum

            One box of each for the four other ingredients

Manufacturing overhead is applied to production at $4 per cake.  Mary purchased the oven using the start-up capital and paid all salaries.  Her nieces worked 300 hours in total for the month.  January was a very good month for the bakery since it baked 200 cakes and sold them all for cash.  The average selling price was $50 per cake.  All manufacturing overhead is closed out at the end of the month.  The supplier was also paid at the end of the month.

1. Make The Statement of Cost of Goods Manufactured for the month of January 2016
2. Make Income Statement for the month of January 2106

TABLE 1: COST INFORMATION [ Item and Ingredients Conventional oven Refrigerator Baking pans & Licenses Baking flour Eggs Sugar Baking Soda Butter Raspberries Others (lemons juice, diced walnuts, nutmeg, confectioner sugar) Computerized cash system Rum (alcohol) Utilities (includes gas, electric, water) Mobile phone (business) Salary -Mary Salary - niece Salary - Aunt Accountant Estimated Monthly Overhead (MOH) Cost $6,000 (depreciated over 5 years, using straight-line depreciation; no salvage value) $0-provided by the landlord $0 provided by dad $24 per 8 pound bag $2 per dozen $15 per 25 pound bag $6 per 14 pound box $6.50 per 4 pounds $8 per 2 pounds $30 for all four containers per month $12 per month (rental for 2 years) $12 per bottle $50 per month $50 per month $500 per month $8 per hour $100 per month $100 per month $4 per cake n/a Standard units/cake 1 bag 4 eggs 1 pound 1 pound pound 1/4 of the bottle 1 niece for 1.5 hours per cake