Question

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

• Purchased $390,000 of materials.
• Used $353,000 of direct materials in production.
• Incurred $101,600 of direct labor wages.
• Applied factory overhead at a rate of 41% of direct labor cost.
• Transferred $470,600 of work in process to finished goods.
• Sold goods with a cost of $447,800.
• Revenues earned by selling bikes, $740,900.
• Incurred $150,600 of selling expenses.
• Incurred $73,300 of administrative expenses.

Prepare the income statement for Rushmore Biking for the month ending February 28. Round your answers to the nearest dollar.

Answer 1

Income statement for Rushmore Biking
for the month ending February 28.	Amount $
Sales Revenue	740,900
Less: Cost of goods sold	447,800
Gross profit	293,100
Expenses
Selling Expense	150,600
Administrative expense	73,300
Total Expenses	223,900
Net Income	69,200