posted by Ashley on .
Income from operations, $151,800 The following events took place for Fed Inc. during October 2012, the first month of operations as a producer of road bikes:
• Purchased $427,000 of materials.
• Used $367,500 of direct materials in production.
• Incurred $315,000 of direct labor wages.
• Applied factory overhead at a rate of 80% of direct labor cost.
• Transferred $892,500 of work in process to finished goods.
• Sold goods with a cost of $848,750.
• Sold goods for $1,500,000.
• Incurred $367,500 of selling expenses.
• Incurred $131,950 of administrative expenses.
1. Prepare the October income statement for Fed. Assume that Fed uses the perpetual inventory method.