Question

The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes:

Purchased $400,000 of materials.
Used $362,100 of direct materials in production.
Incurred $104,200 of direct labor wages.
Applied factory overhead at a rate of 42% of direct labor cost.
Transferred $483,700 of work in process to finished goods.
Sold goods with a cost of $460,300.
Revenues earned by selling bikes, $761,600.
Incurred $154,800 of selling expenses.
Incurred $75,300 of administrative expenses.

Required:
Prepare the income statement for Rushmore Biking for the month ending February 28

Answer 1

Answer: See attachment

Explanation:

Note that in the attachment,

Gross profit was the difference between the revenue and the cost of goods sold. This is:

= 761600 - 460300

= 301300

The selling and administrative expenses was the addition of the selling expense and the administrative expenses.

Check the attachment for further details.