Lane Confectioners produces special orders of sugar candies and chocolates for airlines and hotels

Lane Confectioners produces special orders of sugar candies and chocolates for airlines and hotels. During March, Lane purchased, on credit. 2,100 pounds of confectioner's sugar @ 980 per pound, 2,300 pounds of granulated sugar @ $90 per pound, 900 pounds of chocolate kb $4.00 per pound, and 300 pounds of caramel @1.50 per pound from Seattle Confectionery Supply. ln addition, it purchased for cash 60 dozen eggs kb 5.85 per dozen and 90 pounds of paraffin kb 530 per pound from PMG Foods.

The beginning balances in the inventory accounts were:

Raw Materials Inventory Work in Process Inventory Finished Goods Inventory

The ending balances in the inventory accounts were: Raw Materials Inventory Work in Process Inventory Finished Goods Inventory

52,500 6,500 9,000

$3,500 5,000 6,000

Direct labor costs were $5,400 for 450 hours, indirect labor costs were 52,500, utilities were $400, rent was 5750, and other overhead costs totaled 55,000. Manufacturing overhead is applied at $17 per direct labor hour. Sales during the month were $35,000, and selling and administration expenses were $9,000. (Assume that all of the above were noncash transactions.)

Required

a. Prepare journal entries to record the transactions for the month of March. Assume that over-or under applied overhead is closed to Cost of Goods Sold.

b. Prepare an income statement for the month of March.