Terra Cotta Designs manufactures custom tiles. The following information relates to the fiscal year ending December 31, 2020: 

Beginning balance in Raw Material Inventory......................$ 450,000 

Purchases of raw material......................................................1,500,000 

Ending balance in Raw Material Inventory..............................200,000 

Beginning balance in Work in Process Inventory...................650,000 

Ending balance in Work in Process Inventory........................350,000 

Direct labor cost......................................................................2,500,000 

Manufacturing overhead applied............................................650,000 

Beginning balance in Finished Goods Inventory...................750,000 

Ending balance in Finished Goods Inventory........................350,000 

Sales........................................................................................7,000,000 

Selling expenses.......................................................................500,000 

General and administrative expenses...................................850,000

Required 

a. Prepare a schedule of cost of goods manufactured. Assume that there are no indirect material costs. 

b. Prepare an income statement for fiscal 2020. Ignore income taxes.