• Sage Hill Company is a manufacturer of smartphones. Its controller resigned in October 2022. An inexperienced assistant accountant has prepared the following income statement for the month of October 2022.

  Sage Hill Company Income Statement For the Month Ended October 31, 2022
  Sales revenue					$858,000
  Less:	Operating expenses
  	Raw materials purchases		$290,400
  	Direct labor cost		209,000
  	Advertising expense		99,000
  	Selling and administrative salaries		82,500
  	Rent on factory facilities		66,000
  	Depreciation on sales equipment		49,500
  	Depreciation on factory equipment		34,100
  	Indirect labor cost		30,800
  	Utilities expense		13,200
  	Insurance expense		8,800		883,300
  Net loss					$(25,300)

  
  Prior to October 2022, 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:

  		October 1		October 31
  Raw materials		$19,800		$31,900
  Work in process		22,000		15,400
  Finished goods		33,000		55,000

  
  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.

   

  
  

Chapter 1 Problems Question 2 of 2 Prepare a schedule of cost of goods manufactured for October 2022. (Assume that all raw materials used were direct materials SAGE HILL COMPANY Cost of Goods Manufactured Schedule V V -75 V F 1.1