Question

Santana Rey, owner of Business Solutions, decides to diversify her business by also manufacturing computer workstation furniture, Required: 1. Classify the following manufacturing costs of Business Solutions as (a) variable or fixed and (b) direct or indirect. 2. Prepare a schedule of cost of goods manufactured for Business Solutions for the month ended January 31, 2020. Assume the following manufacturing costs: Direct materials: $2.200 Factory overhead: $540 Direct labor: $1.100 Beginning work in process: none (December 31, 2019) Ending work in process: $570 (January 31, 2020) Beginning finished goods inventory: none (December 31, 2019) Ending finished goods inventory: $300 (January 31, 2020) 3. Prepare the cost of goods sold section of a partial income statement for Business Solutions for the month ended Jan 20. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the cost of goods sold section of a partial income statement for Business Solutions for the month ended January 31, 2020 BUSINESS SOLUTIONS < Prey 2 of 12 Next >

Answer 1

Product Costs Cost by Traceability Indirect Direct 1 Monthly flat fee to clean workshop 2 Laminate coverings for desktops 3 Taxes on assembly workshops 4 Glue to assemble workstation component parts 5 Wages to desk assembler 6 Electricity for workshop 7 Depreciation on tools Cost by Behavior Fixed Variable Fixed Variable Variable Variable Indirect Indirect Direct Indirect Indirect Fixed BUSINESS SOLUTIONS Schedule of cost of goods manufactured For Month Ended January 31, 2020 Direct materials (a) $ Direct labor Factory overhead Total Manufacturing Costs (d) = (a) + (b) + (c) $ Add: Beginning work in process Total cost of goods in process Less: Ending work in process Cost of goods manufactured (b) (c) 2,200 1,100 540 3,840 $ 3,840 -570 3,270 $ BUSINESS SOLUTIONS Partial Income Statement For Month Ended January 31, 2020 Cost of Goods Sold Beginning Finished Goods Inventory Cost of Goods Manufactured $ 3,270 Cost of Goods Available for Sale Less: Ending Finished Goods Inventory Cost of Goods Sold 3,270 -300 $ 2,970