Question 33

During 2016, Rafael Corp. produced 39,120 units and sold 39,120 for $16 per unit. Suppose the accountant for Rafael Corp. uses normal costing and uses the budgeted volume of 48,900 units. Variable manufacturing costs were $6 per unit. Annual fixed manufacturing overhead was $78,240 ($2 per unit). Variable selling and administrative costs were $2 per unit sold, and fixed selling and administrative expenses were $19,400. The company expenses production volume variance to cost of goods sold in the accounting period in which it occurs.

Prepare a normal-costing income statement for the first year of operation.