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)VariableFixed	(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)FixedVariable	(Click to select)IndirectDirect
4. Glue to assemble workstation component parts	(Click to select)FixedVariable	(Click to select)IndirectDirect
5. Wages of desk assembler	(Click to select)VariableFixed	(Click to select)IndirectDirect
6. Electricity for workshop	(Click to select)FixedVariable	(Click to select)IndirectDirect
7. Depreciation on tools	(Click to select)VariableFixed	(Click to select)DirectIndirect

Direct materials: $2,300

Factory overhead: $480

Direct labor: $900

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

Ending goods in process: $580 (January 31, 2012)

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

Ending finished goods inventory: $330 (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 materialsFactory overhead costsAdd: Goods in process, December 31, 2011Less: Goods in process, January 31, 2012Direct labor	$
(Click to select)Direct laborAdd: Goods in process, December 31, 2011Factory overhead costsLess: Goods in process, January 31, 2012Direct materials
(Click to select)Direct materialsAdd: Goods in process, December 31, 2011Direct laborLess: Goods in process, January 31, 2012Factory overhead costs
Total manufacturing costs
(Click to select)Direct laborCost of goods manufacturedFactory overhead costsAdd: Goods in process, December 31, 2011Less: Goods in process, January 31, 2012
Total cost of goods in process
(Click to select)Direct laborLess: Goods in process, January 31, 2012Cost of goods manufacturedFactory overhead costsAdd: Goods in process, December 31, 2011
(Click to select)Add: Goods in process, December 31, 2011Less: Goods in process, January 31, 2012Cost of goods manufacturedDirect laborFactory overhead costs	$

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)Factory overhead costsGoods available for saleFinished goods inventory, December 31, 2011Less: Finished goods inventory, January 31, 2012Cost of goods manufactured	$
(Click to select)Less: Finished goods inventory, January 31, 2012Cost of goods manufacturedGoods available for saleFinished goods inventory, December 31, 2011Factory overhead costs
(Click to select)Cost of goods manufacturedDirect laborFinished goods inventory, December 31, 2011Goods available for saleFactory overhead costs
(Click to select)Finished goods inventory, December 31, 2011Factory overhead costsCost of goods manufacturedLess: Finished goods inventory, January 31, 2012Direct labor
Cost of goods sold	$

Answer 1

1	Product costs				Cost by behaviour	Cost by Traceability
	Monthly flat fee to clean workshop				Fixed	Indirect
	Laminate coverings for desktops				Variable	Direct
	Taxes on assembly workshop				Fixed	Indirect
	Glue to assemble workstation component parts				Variable	Indirect
	Wages of desk assembler				Variable	Direct
	Electricity for workshop				Variable	Indirect
	Depreciation on tools				Fixed	Indirect
2		Manufacturing statement
	Direct materials					2300
	Direct labor					900
	Factory overhead					480
	Total manufacturing cost					3680
	Add: Beginning goods in process					0
						3680
	Less: Ending goods in process					580
	Cost of goods manufactured					3100
3			Partial income statement
	Cost of goods manufactured					3100
	Add: beginning finished goods inventory					0
						3100
	Less: Ending finished goods inventory					330
	Cost of goods sold					2770