The following events took place for Fed Inc. during October 2012, the first month of operations as a producer of road bikes:
- Purchased $427,000 of materials.
- Used $367,500 of direct materials in production.
- Incurred $315,000 of direct labor wages.
- Applied factory overhead at a rate of 80% of direct labor cost.
- Transferred $892,500 of work in process to finished goods.
- Sold goods with cost of $848,750.
- Sold goods for $1,500,000.
- Incurred $367,500 of selling expenses.
- Incurred $131,950 of administrative expenses.
b. Determine the inventory balances at the end of the first month of operations.