Valenko Company provided the following account balances for the year ended December raw materials are used in production as direct materials):
Selling expenses................ 215,000
Purchases of raw materials............ 260,000
Direct labor.................. ?
Administrative expenses............. $160,000
Manufacturing overhead applied to work in process.. $340,000
Total actual manufacturing overhead costs...... $350,000
Inventory balances at the beginning and end of the year were as follows:

The total manufacturing costs for the year were $675,000; the cost of goods available for sale totaled $720,000; the unadjusted cost of goods sold totaled $665,000; and the net operating income was $35,000. The company€™s overapplied or underapplied overhead is closed entirely to cost of goods sold.

Required:
Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement.

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Beginning of Year $50,000 $30,000 End of Year Raw materials Work in process. Finished goods. $40,000 $33,000