Santana Rey, owner of Business solutions, decides to diversify her business by also manufacturing computer workstation furniture.
Question:
Required
1. Classify the following manufacturing costs of Business Solutions as either
(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, 2016. Assume the following manufacturing costs:
Direct materials: $2,200
Factory overhead: $490
Direct labor: $900
Beginning work in process: none (December 31, 2015)
Ending work in process: $540 (January 31, 2016)
Beginning finished goods inventory: none (December 31, 2015)
Ending finished goods inventory: $350 (January 31, 2016)
3. Prepare the cost of goods sold section of a partial income statement for Business Solutions for the month ended January 31, 2016.
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