Reference no: EM132777214

Question - Thornton Manufacturing Corporation was started with the issuance of common stock for $50,000. It purchased $7,400 of raw materials and worked on three job orders during Year 1 for which data follow. (Assume that all transactions are for cash unless otherwise indicated.)

Direct Raw Materials Used Direct Labor

Job 1 $1,300 $2,000

Job 2 1,900 3,700

Job 3 3,200 2,100

Total $6,400 $7,800

Factory overhead is applied using a predetermined overhead rate of $0.70 per direct labor dollar. Jobs 2 and 3 were completed during the period and Job 3 was sold for $10,470 cash. Thornton paid $400 for selling and administrative expenses. Actual factory overhead was $6,060.

Required - Prepare schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for Year 1.