Question

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

A: Classify the following manufacturing costs of Business Solutions as (a) variable or fixed and (b) direct or indirect.

Product Costs                                                     Cost by Behavior    Cost by Traceability

1. Monthly flat fee to clean workshop

2. Laminate coverings for desktops

3. Taxes on assembly workshop

4. Glue to assemble workstation component parts

5. Wages of desk assembler

6. Electricity for workshop

7. Depreciation on manufacturing tools

B: Prepare a schedule of cost of goods manufactured for Business Solutions for the month ended January 31, 2018.

Direct materials: $2,100

Factory overhead: $470

Direct labor: $900

Beginning work in process: none (December 31, 2017)

Ending work in process: $580 (January 31, 2018)

Beginning finished goods inventory: none (December 31, 2017)

Ending finished goods inventory: $360 (January 31, 2018)

C: Prepare the cost of goods sold section of a partial income statement for Business Solutions for the month ended January 31, 2018

Note: Please solve the problem completely with details that I can practice and learn. Thank you.

Answer 1

1. Monthly flat fee to clean workshop: fixed, indirect

2. Laminate coverings for desktops: variable, direct

3. Taxes on assembly workshop: indirect, fixed

4. Glue to assemble workstation component parts: variable, direct

5. Wages of desk assembler: fixed, indirect

6. Electricity for workshop: fixed, indirect

7. Depreciation on manufacturing tools: fixed, indirect

Part B

Beginning Finished goods Inventory January 1,2018	$0	a
Add: Cost of Goods Manufactured	**	b
Cost of Goods available for sale	***	c = a+b
Less :Ending Finished goods Inventory as on January 31,2018	$ 360	d
Cost of Good Sold	****	e = c-d

I do hope that you have figure for Cost of Goods Manufactures so not calculated it, you may put in the figures in the performa to get the answer. If you require me to calculate it please let know. Thanks