The following accounts and amounts (balances are normal balances) were taken from the records of Prider Manufacturers Ltd at 30 June 2016:

Advertising expense Sales travel expense Depreciation – factory machinery Depreciation – office equipment Direct labour Factory power Factory rent Factory supplies Finished goods, 1/7/15 Finished goods, 30/6/16 Freight inwards (materials) Indirect labour Machinery repairs

$120 000 36 600 38 400 14 400 390 000 36 000 240 000 296 000 260 000 250 000 17 400 128 000 77 800

Administrative office rent Office salaries Rates – factory Discounts received on raw materials Raw materials inventory, 1/7/15 Raw materials inventory, 30/6/16 Raw materials purchases Sales revenue Sales returns Sales commissions Work in process, 1/7/15 Work in process, 30/6/16

$60 000 422 400 48 000 8 000 115 200 124 800 1 280 000 3 800 000 62 800 114 600 54 000 60 000

Note: All amounts exclude GST.

Required

A. Prepare a cost of goods manufactured statement for the year ended 30 June 2016.

B. Prepare an income statement for the year ended 30 June 2016.

C. The industry average for Gross Profit margin is 30% and the Profit margin is 10%. Explain how Malak Manufacturers Ltd’s financial performance compares to the industry average.