Question 1 (Marks: 12) 12 MicroMax 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. MicroMax Company Income Statement For the Month Ended October 31, 2020 Amount (S) Amount (S) 790000 Sales Revenue less: Operating Expenses Raw Materials purchases 260000 Direct Labor cost 190000 Advertising cost 90000 Selling & Administrative Salaries 75000 Rent on factory facilities 60000 Depreciation on factory equipment 45000 Depreciation on Sales equipment 31000 Indirect labor 30000 Utilities expense 15000 Insurance Expense 10000 806000 -16000 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. Oct-01 Oct-31 $18000 $29000 Raw Materials Work in process $20000 $14000 Finished Goods $30000 $50000 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. Instructions a. Outline a schedule of cost of goods manufactured for October 2020. b. Outline a correct income Statement