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

Cost by Cost by Behaviour Traceability 1 Monthly flat fee to clean workshop fixed indirect 2 laminate coverings for desktops Variable direct 3 taxes on assembly workshops fixed indirect 4 Glue to assemble workstation component parts Variable indirect 5 Wages to desk assembler Variable direct 6 Electricity for workshop Variable indirect 7 Depreciation on tools fixed indirect Schedule of cost of goods manufactured Direct materials 2,200 direct labor 1,100 Factory overhead 540 total manufacturing costs 3,840 Beginning work in process 0 total cost of goods in process 3,840 Ending work in process 510 cost of goods manufactured 3,330 Partial income statement cost of goods sold beginning finished goods inventory 0 cost of goods manufactured 3,330 cost of goods available for sale 3,330 ending finished goods inventory 310 cost of goods sold 3,020

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