Swift Company was organized on 1 March of the current year. After five months of start-up losses, management had expected to earn a profit during August, the most recent month. Management was disappointed, however, when the statement of profit or loss for August also showed a loss. August's statement of profit or loss follows.

Swift Company
Statement of profit or loss
For the month ended 31 August
Revenue		690,000
Less operating expenses:
Indirect labour cost	28,000
Utilities	30,500
Direct labour cost	110,000
Depreciation, factory equipment	37,000
Raw materials purchased	248,000
Depreciation, sales equipment	34,000
Insurance	5,600
Rent on facilities	66,000
Selling and administrative salaries	48,000
Advertising	91,000	698,100
Operating loss		(8,100)

After seeing the 8,100 loss for August, Swift's managing director stated, 'I was sure we'd be profitable within six months, but our six months are up and this loss for August is even worse than July's. I think it's time to start looking for someone to buy out the company's assets if we don't, within a few months there won't be any assets to sell. By the way, I don't see any reason to look for a new manager. We'll just limp along with Sam for the time being.'

The company's management accountant resigned a month ago. Sam, a new assistant in the management accounting office, prepared the statement of profit or loss above. Sam has had little experience in manufacturing operations. Additional information about the company is as follows:

(a)	Some 60% of the utilities cost and 75% of the insurance apply to factory operations. The remaining amounts apply to selling and administrative activities.
(b)	Inventory balances at the beginning and end of August were:
		1 August	31 August
	Raw materials	9,600	16,200
	Work in progress	19,200	25,800
	Finished goods	48,000	76,000
(c)	Only 80% of the rent on facilities applies to factory operations; the remainder applies to selling and administrative activities.

The managing director has asked you to check over the statement of profit or loss and make a recommendation as to whether the company should look for a buyer for its assets.

Required:
1.	As one step in gathering data for a recommendation to the managing director, prepare a schedule of cost of goods manufactured in good form for August. (Enter all your answers as a positive amounts.)

2.	As a second step, prepare a new statement of profit or loss for August. (Enter all your answers as a positive amounts.)

3.	Based on your statements prepared in Questions 1 and 2 above, is the company in a better financial position than previously thought?
	multiple choice Yes No