Fundamental Accounting Principles 22th Edition by John Wild ,Ken Shaw,Barbara Chiappetta

Exercise 47

(This serial problem begins in Chapter 1 and continues through most of the book. If previous chapter segments were not completed, the serial problem can begin at this point. It is helpful, but not necessary, to use the Working Papers that accompany the book.)
SP 18 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 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.