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 (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, 2020. Assume the following manufacturing costs: Direct materials: $2,600 Factory overhead: $520 Direct labor: $1,200 Beginning work in process: none (December 31, 2019) Ending work in process: $590 (January 31, 2020) Beginning finished goods inventory: none (December 31, 2019) Ending finished goods inventory: $370 (January 31, 2020) 3. Prepare the cost of goods sold section of a partial income statement for Business Solutions for the month ended January 31, 2020. Pre

Results are below.

Explanation:

First, we need to calculate the following costs as variable-fixed, and direct-indirect:

Direct materials: $2,600 (variable - direct)

Factory overhead: $520 (mixed - indirect)

Direct labor: $1,200 (variable - direct)

Now, we can calculate the cost of goods manufactured using the following formula:

cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

cost of goods manufactured= 0 + 2,600 + 1,200 + 520 - 590

cost of goods manufactured= 3,730

Finally, the cost of goods sold:

beginning finished inventory= 0

cost of goods manufactured= 3,730

ending finished inventory= (370)

COGS= $3,360

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