The Jacobson Manufacturing Company Was Started at the Beginning of the Current

Essay

The Jacobson Manufacturing Company was started at the beginning of the current year when it acquired $200,000 from its owners.During the year,the company incurred the following costs,all for cash:
$$\begin{array} { l r } \text { Direct material costs } & \$ 80,000 \\\text { Direct labor costs } & 100,000 \\\text { Overhead costs } & 40,000 \\\text { Selling and adrninistrative costs } & 60,000\end{array}$$ The company produced 10,000 units of product and sold 8,000 units.The average selling price was $34.00 per unit; all sales were for cash.The accountant who prepared the firm's financial statements misclassified the selling and administrative costs as product costs.
Required:
Demonstrate the impact of the error on the company's income statement and balance sheet by completing the following schedule: