Empire 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. EMPIRE COMPANY Income Statement For the Month Ended October 31, 2020 Sales revenue $793,400 $263,700 Less: Operating expenses Raw materials purchases Direct labor cost Advertising expense Selling and administrative salaries Rent on factory facilities Depreciation on sales equipment Depreciation on factory equipment Indirect labor cost 189,400 92,700 77,400 62,700 44,100 32,500 28,400 12,200 8,700 Utilities expense Insurance expense 811,800 $(18,400) Net loss 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: Raw materials Work in process Finished goods October 1 $20,900 19,100 October 31 $36,000 14,700 53,500 31.000 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. Your answer has been saved. See score details after the due date. Prepare a schedule of cost of goods manufactured for October 2020. EMPIRE COMPANY Cost of Goods Manufactured Schedule For the Month Ended October 31, 2020 Work in Process Inventory, October 1 $ Direct Materials Raw Materials Inventory, October 1 $ 20.900 Raw Materials Purchases 263.700 Total Raw Materials Available for Use 284.600 Less : Raw Materials Inventory, October 31 36,000 Direct Materials Used $ 248,600 Direct Labor 189,400 Manufacturing Overhead Factory Insurance 5,220 Factory Utilities 9.150 Depreciation on Factory Equipment 32.500 Indirect Labor 28,400 Factory Facility Rent 62.700 Total Manufacturing Overhead 137,970 Total Manufacturing Costs Total Cost of Work in Process Less : Work in Process Inventory, October 31 Cost of Goods Manufactured $ Attempts: 1 of 1 used 1 (b) Your answer has been saved. See score details after the due date. Prepare a schedule of cost of goods manufactured for October 2020. EMPIRE COMPANY Cost of Goods Manufactured Schedule For the Month Ended October 31, 2020 intory, October 1 $ 19,100 tory, October 1 $ 20,900 ases 263.700 Available for Use 284.600 aterials Inventory, October 31 36.000 d $ 248,600 189.400 head 5.220 9.150 ory Equipment 32,500 28.400 62.700 Overhead 137.970 Costs 575.970 Process 595,070 Process Inventory, October 31 14.700 factured $ 580,370 Attempts: 1 of 1 used (b) Prepare a correct income statement for October 2020. EMPIRE COMPANY Income Statement For the Month Ended October 31, 2020 Sales Revenue $ Cost of Goods Sold Finished Goods Inventory, October 1 $ Cost of Goods Manufactured Cost of Goods Available for Sale Less : Finished Goods Inventory, October 31 Cost of Goods Sold Gross Profit Operating Expenses Advertising Expense Selling and Administrative Salaries Depreciation Expense-Sales Equipment Utilities Expense Insurance Expense Total Operating Expenses Net Income /(Loss) $ Save for Later Last saved 5 seconds ago. Attempts: 0 of 1 used Submit Answer Saved work will be auto-submitted on the due date
