Exercise 2-4 Prepare a Schedule of Cost of Goods Manufactured [LO4]

Classic Sound is a start-up company that produces vinyl records for numerous record labels worldwide. The company has two full-time employees working in the production department while the CEO splits her time 80/20% between developing new business and overseeing the production process. Information taken from the accounting records for the first three months of operations is shown below.

Beginning raw materials inventory	$	0
Purchases of raw materials		50,500
Ending raw materials inventory		25,250
Direct labour		40,450
Manufacturing overhead		30,350
Beginning work in process inventory		0
Ending work in process inventory		5,100
Purchase of production equipment		105,000
Rent for production facility		9,150

Required:

1. Prepare a schedule of cost of goods manufactured for the company for the month. (Do not leave any empty spaces; input a 0 wherever it is required.)

2. What types of expenses are likely included in the total manufacturing overhead cost of $30,350 incurred for the first three months of operation? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

check all that apply

• Selling expenseunanswered
• Administrative expenseunanswered
• Ending work in process inventoryunanswered
• Rent for the production facilityunanswered
• Depreciation on the production equipmentunanswered
• Insurance on the production equipmentunanswered
• Indirect materials used in producing recordsunanswered
• Indirect labour related to the CEO's supervision of the production process (20% of her time).unanswered
• Indirect labour related to production facility repair, maintenance, and security.