Answer:
Missing word <em>"b. Determine the inventory balances at the end of the first month of operations."</em>
a) Income statement
Sales $1,200,000
Cost of goods sold <u>$675,000</u>
Gross profit $525,000
<u>Selling and administrative expense</u>
Selling expense $215,000
Administrative expense <u>$125,000</u>
Total Selling and administrative expense <u>$340,000</u>
Operating income <u>$185,000</u>
b) Inventory balance
Raw material inventory ($250,000 - $180,000) = $70,000
Work in process ($180,000+$450,000+$180,000-$760,000) = $50,000
Finished goods ($760,000-$675,000) = $85,000