The fields in yellow require an answer. Thank you. ---## PR 2-5A Flow of Costs and Income Statement**Objective:** Obj. 2Ginocera Inc. is a designer, manufacturer, and distributor of custom gourmet kitchen knives. A new kitchen knife series called the Kitchen Ninja was released for production in early 2018. In January, the company spent $600,000 to develop a late-night advertising infomercial for the new product. During 2018, the company spent an additional $1,400,000 promoting the product through these infomercials, and $800,000 in legal costs. The knives were ready for manufacture on January 1, 2018.Ginocera uses job order costing to accumulate costs associated with the Kitchen Ninja Knife. The unit direct materials cost for the knife is:- Hardened steel blanks (used for knife shaft and blade): $4.00- Wood (for handle): $1.50- Packaging: $0.50### Production ProcessThe production process is straightforward. First, the hardened steel blanks, which are purchased directly from a raw material supplier, are stamped into a single piece of metal that includes both the blade and the shaft. The stamping machine requires one hour per 250 knives.After the knife shafts are stamped, they are brought to an assembly area where an employee attaches the handle to the shaft and packs the knife into a decorative box. The direct labor cost is $0.50 per unit.### Distribution and CostsThe knives are sold to stores. Each store is given promotional materials, such as posters and aisle displays. Promotional materials cost $60 per store. In addition, shipping costs average $0.20 per knife.### Annual Production and Sales Data1,200,000 units were produced during the year. Other relevant information is as follows:- Number of customers (stores): 60,000- Number of knives sold: 1,120,000- Wholesale price (to store) per knife: $16Factory overhead cost is applied to jobs at the rate of $800 per stamping machine hour after the knife blanks are stamped. There were an additional 25,000 stamped knives, handles, and cases in process and waiting to be assembled on December 31, 2018.### Instructions1. **Prepare an annual income statement for the Kitchen Ninja knife series, including supporting computations, from the information provided.**2. **Determine the balances in the ---## Ginoacera, Inc.### Income Statement#### For the Year Ended December 31, 2016| **Description** | **Amount** ||------------------------------ |------------|| **Sales** | `$ -` || **Cost of goods sold** | `#DIV/0!` || **Gross profit** | `#DIV/0!` |**Selling and administrative expenses:**| Sales commission expense | `$ -` || Promotion and advertising expense | [Highlighted cell] || Total selling and administrative expenses | `#DIV/0!` || **Income from operations** | `#DIV/0!` |---### Additional Details#### Number of units sold| **Description** | **Amount** ||-----------------------------|--------------------|| Wholesale price per unit | [Highlighted cell] || Sales | `$ -` || Commission rate | || Sales commission expense | `$ -` |#### Units Produced| **Description** | ||---------------------------------|---------------|| Direct materials | `-` || Direct labor | `-` || Factory overhead | `#DIV/0!` || Total cost of units produced | `#DIV/0!` || Cost per unit | `#DIV/0!` || Units sold | `-` || Cost of goods sold | `#DIV/0!` || Finished goods inventory balance | `#DIV/0!` || WIP inventory balance | `#DIV/0!` |#### WIP Details| **Description** | ||------------------------------------|---------------------|| WIP units | || Units produced | [Highlighted cell] || DM unit cost | || DL unit cost | || FOH Rate | `per machine hour` || Units produced per machine hour | |---**Notes:**- The sheet indicates an attempt to calculate several financial metrics such as gross profit, cost of goods sold, and various expense categories. - The cells showing `#DIV/0!` suggest division by zero errors, indicating possibly incomplete data or incorrect formulas applied within the spreadsheet.-

Income Statement: Company's income and expenditures along with profit or loss during the…

Ginocera Inc. is a designer, manufacturer, and distributor of custom gourment kitchen knives. A new kitchen knife series called the Kitchen Ninja was released for production in early 20Y8. In January, the company spent $600,000 to develop a late-night advertising infomercial for the new product. During 20Y8, the company spent an additional $1,400,000 promoting the product through these infomercials, and $800,000 in legal costs. The knives were ready for manufacture on January 1, 20Y8. Ginocera uses job order costing to accumulate costs associated with the Kitchen Ninja Knife. The unit direct materials cost for the knife is: Hardened steel blanks (used for knife shaft and blade) $4.00 Wood (for handle) 1.50 Packaging 0.50 The production process is straightforward. First, the hardened steel blanks, which are purchased directly from a raw material supplier, are stamped into a single piece of metal that includes both the blade and the shaft. The stamping machine requires one hour per 250 knives. After the knife shafts are stamped, they are brought to an assembly area where an employee attaches the handle to the shaft and packs the knife into a decorative box. The direct labor cost