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 by behavior and traceability.

Product Costs	Cost by Behavior	Cost by Traceability
1. Monthly flat fee to clean workshop	(Click to select)FixedVariable	(Click to select)IndirectDirect
2. Laminate coverings for desktops	(Click to select)VariableFixed	(Click to select)IndirectDirect
3. Taxes on assembly workshop	(Click to select)VariableFixed	(Click to select)IndirectDirect
4. Glue to assemble workstation component parts	(Click to select)VariableFixed	(Click to select)DirectIndirect
5. Wages of desk assembler	(Click to select)VariableFixed	(Click to select)IndirectDirect
6. Electricity for workshop	(Click to select)FixedVariable	(Click to select)DirectIndirect
7. Depreciation on tools	(Click to select)VariableFixed	(Click to select)DirectIndirect

Direct materials: $2,200

Factory overhead: $540

Direct labor: $1,100

Beginning goods in process: none (December 31, 2011)

Ending goods in process: $510 (January 31, 2012)

Beginning finished goods inventory: none (December 31, 2011)

Ending finished goods inventory: $310 (January 31, 2012)

2.	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.)

Business Solutions
Manufacturing Statement
For Month Ended January 31, 2012
(Click to select)Direct laborDirect materialsAdd: Goods in process, December 31, 2011Factory overhead costsLess: Goods in process, January 31, 2012	$
(Click to select)Add: Goods in process, December 31, 2011Direct laborFactory overhead costsDirect materialsLess: Goods in process, January 31, 2012
(Click to select)Direct laborFactory overhead costsDirect materialsLess: Goods in process, January 31, 2012Add: Goods in process, December 31, 2011
Total manufacturing costs
(Click to select)Direct laborCost of goods manufacturedAdd: Goods in process, December 31, 2011Factory overhead costsLess: Goods in process, January 31, 2012
Total cost of goods in process
(Click to select)Add: Goods in process, December 31, 2011Cost of goods manufacturedDirect laborLess: Goods in process, January 31, 2012Factory overhead costs
(Click to select)Less: Goods in process, January 31, 2012Factory overhead costsCost of goods manufacturedAdd: Goods in process, December 31, 2011Direct labor	$

3.	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.)

Business Solutions
Partial Income Statement
For Month Ended January 31, 2012
(Click to select)Less: Finished goods inventory, January 31, 2012Cost of goods manufacturedFinished goods inventory, December 31, 2011Factory overhead costsGoods available for sale	$
(Click to select)Finished goods inventory, December 31, 2011Less: Finished goods inventory, January 31, 2012Goods available for saleFactory overhead costsCost of goods manufactured
(Click to select)Cost of goods manufacturedFactory overhead costsFinished goods inventory, December 31, 2011Goods available for saleDirect labor
(Click to select)Finished goods inventory, December 31, 2011Cost of goods manufacturedLess: Finished goods inventory, January 31, 2012Direct laborFactory overhead costs
Cost of goods sold	$

Answer 1

						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