Assuming the direct materials is 1 pound , the cost of goods sold is $2,053,920 and the income statement is: $339,248.
<h3>Cost of goods sold</h3>
Cost of goods sold for 2017
Cost of one unit of finished goods:
Direct materials $6
Direct labor $36
(3×$12)
Manufacturing overhead $24
(3×$8)
Total $66
Cost of goods sold $2,053,920
($66×31,120)
Budgeted multi-step income statement for 2017:
Sales revenue $2,738,560
($88×31,120)
Less cost of goods sold $2,053,920
Gross profit $684,640
Less selling and administrative expense $170,000
Income from operation before interest and tax $514,640
($684,640-$170,000)
Less interest expense $30,000
Profit before tax $484,640
($514,640-$30,000)
Less income tax expense $145,392
(30%×$484,640)
Profit after tax $339,248
($484,640-$145,392)
Inconclusion the cost of goods sold is $2,053,920 and the income statement is: $339,248.
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