Problem 1: Income Statement and Supporting Schedules.The following financial information is for Caravelli Company. (Note that the most current financial information is presented in the first column.)

	December 31, 2019	December 31, 2018
Raw materials inventory	$ 24,000	$ 30,000
Work-in-process inventory	1,800,000	1,650,000
Finished goods inventory	1,050,000	1,230,000

Of the total raw materials placed in production for the year, $36,000 was for indirect materials. The company had $3,795,000 in sales for the year ended December 31, 2019. The company also had the following costs for the year:

Selling	$ 270,000
General and administrative	720,000
Raw materials purchases	300,000
Direct labor used in production	375,000
Manufacturing overhead	1,890,000

Required:

1. Make a schedule of raw materials placed in production for the year ended December 31, 2019.
2. Make a schedule of cost of goods manufactured for the year ended December 31, 2019.
3. Make a schedule of cost of goods sold for the year ended December 31, 2019.
4. Make an income statement for the year ended December 31, 2019.

Problem 2: Identifying Cost Behavior.Mining, Inc., is trying to identify the cost behavior of the three costs shown. Cost information is provided for six months.

		Cost 1	Cost 2	Cost 3
Month	Units Produced	Total Costs	Cost per Unit	Total Costs	Cost per Unit	Total Costs	Cost per Unit
1	8,000	$10,000	_____	$24,000	_____	$32,000	_____
2	10,000	10,000	_____	29,000	_____	40,000	_____
3	12,000	10,000	_____	33,600	_____	48,000	_____
4	14,000	10,000	_____	36,400	_____	56,000	_____
5	16,000	10,000	_____	38,400	_____	64,000	_____
6	18,000	10,000	_____	39,600	_____	72,000	_____

Required:

1. Calculate the cost per unit, and then identify how the cost behaves (fixed, variable, or mixed) for each of the three costs