P1-5B Cinta Company is a manufacturer of toys. Its controller resigned in August 2011. An inexperienced assistant accountant has prepared the following income statement for the month of August 2011. 

CINTA COMPANY

Income Statement
For the Month Ended August 31,   2011
Sales (net)                                             $675,000
Less:  Operating expenses
Raw materials purchases                            $220,000
Direct labor cost                                       160,000
Advertising expense                                  75,000 
Selling and administrative salaries                70,000 
Rent on factory  facilities                           60,000
Depreciation on sales  equipment                 50,000 
Depreciation  on  factory equipment              35,000 
Indirect labor cost                                     20,000
Utilities expense                                       10,000
Insurance expense                                     5,000                 705,000 
Net loss                                                  $ (30,000)