Requirement 3

Draper has decided to manufacture billing software to sell to its clients. During the first month of manufacturing, Draper incurred the following costs:

Inventories:	Beginning		Ending
Materials	10,800		10,300
Work in Process	0		21,000
Finished Goods	0		31,500
Other Information:
Direct Materials Purchased	19,000	Plant Utilities	10,000
Plant Janitorial Services	700	Plant Rent	13,000
Sales Salaries Expense	5,000	Customer Hotline Expense	18,000
Delivery Expense	1,700	Direct Labor	190,000
Sales Revenue	750,000

a. Prepare a Schedule of Cost of Goods Manufactured and an Income Statement for the month ended January 31, 2014.

b. If Draper sells 19,750 software products for the month, how much does it cost to manufacture one unit?

Draper Consulting, Inc Income Statement Month Ended January 31, 2014 Sales revenue Cost of goods sold: Cost of goods sold Gross profit Cost to manufacture one unit