Santana Rey, owner of Business Solutions, decides to diversify her business by a

Question

Santana Rey, owner of Business Solutions, decides to diversify her business by also manufacturing computer workstation furniture.

Classify the following manufacturing costs of Business Solutions by behavior and traceability.

Assume the above manufacturing costs. Prepare a manufacturing statement for Business Solutions for the month ended January 31, 2012. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Prepare the cost of goods sold section of a partial income statement for Business Solutions for the month ended January 31, 2012. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Santana Rey, owner of Business Solutions, decides to diversify her business by also manufacturing computer workstation furniture.

Explanation / Answer

Req 1: Product Cost Cost By behaviour Cost By traceability 1. Monthly Flat fee to cleanupp Fixed Indirect 2. laminate covering for desktop variable Direct 3. taxes on assembly workshop Fixed Indirect 4. Glue for assemble workshop component variable Indirect 5. Wages for desk assembler variable Direct 6. Electricity of Workshop Fixed Indirect 7. Depreciation on tools Fixed Indirect Req 2: MANUFACTURING STATEMENT Direct material 2600 Direct Labour 900 Factory Overheads 550 Total manufacturing cost 4050 Add: Beginning in process 0 Total cost of goods in process 4050 Less: Ending Good in process 550 Cost of Goods manufactured 3500 Req 3: PARTIAL INCOME STATEMENT Cost of Goods manufactured 3500 Add: Beginning Inventory of FG 0 Cost of Goods available for sale 3500 Less: Ending finished Goods inventory 370 Cost of Goods sold 3130

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