Swift Company was organized on March 1 of the current year. After five months of startup losses, management had expected to earn a profit during August, the most recent month. Management was disappointed, however, when the income statement for August also showed a loss. Augusts income statement follows:

SWIFT COMPANY Income Statement For the Month Ended August 31
Sales			$	470,000
Less: Operating expenses:
Indirect labour cost	$	13,200
Utilities		15,000
Direct labour cost		66,000
Depreciation, factory equipment		25,000
Raw materials purchased		177,000
Depreciation, sales equipment		18,000
Insurance		2,600
Rent on facilities		43,000
Selling and administrative salaries		36,000
Advertising		80,700		476,500
Net loss			$	(6,500)

The companys controller resigned a month ago. Sam, a new assistant in the controllers office, prepared the income statement above. Sam has had little experience in manufacturing operations. After seeing the $6,500 loss for August, Swifts president stated, I was sure wed be profitable within six months, but our six months are up and this loss for August is even worse than Julys. I think its time to start looking for someone to buy out the companys assetsif we dont, within a few months there wont be any assets to sell. By the way, I dont see any reason to look for a new controller. Well just limp along with Sam for the time being.

Additional information about the company follows:

a.	Some 60% of the utilities cost and 70% 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 as follows:

	August 1		August 31
Raw materials	$	20,000	$	17,000
Work in process		8,000		18,000
Finished goods		43,000		48,000

c.	Only 75% of the rent on facilities applies to factory operations; the remainder applies to selling and administrative activities.

The president has asked you to check over the income statement and make a recommendation about whether the company should look for a buyer for its assets.

Required:

1.	As one step in gathering data for a recommendation to the president, prepare a schedule of cost of goods manufactured in good form for August.

2.	As a second step, prepare a new income statement for August.