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Question: queens company is a manufacturer of smart phones its controller...

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Queens Company is a manufacturer of smart phones. Its controller resigned in October 2020. An inexperienced assistant accountant has prepared the following income statement for the month of October 2020.

Queens COMPANY
Income Statement
For the Month Ended October 31, 2020

Sales revenue $ 793,900
Less: Operating expenses
Raw materials purchases $ 264,800
Direct labor cost 188,400
Advertising expense 91,800
Selling and administrative salaries 76,400
Rent on factory facilities 62,000
Depreciation on sales equipment 44,000
Depreciation on factory equipment 32,800
Indirect labor cost 29,000
Utilities expense 11,800
Insurance expense 8,500 809,500
Net loss $( 15,600)


Prior to October 2020, the company had been profitable every month. The company’s president is concerned about the accuracy of the income statement. As her friend, you have been asked to review the income statement and make necessary corrections. After examining other manufacturing cost data, you have acquired additional information as follows.

1. Inventory balances at the beginning and end of October were:

October 1

October 31

Raw materials $ 20,300 $ 35,900
Work in process 20,100 15,000
Finished goods 29,700 53,500


2. Only 75% of the utilities expense and 60% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities.

(a)

Prepare a schedule of cost of goods manufactured for October 2020.

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