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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 $794,900 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 Utilities expense Insurance expense 264,100 189,300 91,400 76,100 61,600 45,000 32,500 28,500 12,500 8,500809,500 Net loss $(14,600)Prior to October 2020, the company had beenpotable every month. The companys 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 21,000 35,200 Work in process 20,40014,200 29,700 53.600 Finished goods 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.

Prepare a schedule of cost of goods manufactured for October 2020. EMPIRE COMPANY Cost of Goods Manufactured Schedule

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Naming Convention can be slightly different per question requirement: Sign of Less amount can be negative or postive as per question requirement: Solution: Cost of goods Manufactured Schedule For the month ended Oct.31,2020 Work in Process Inventory, Oct 1 Direct Materials: Raw Material, January 1 Raw Material Purchased Raw Material available for use Less: Raw Material, Oct 31 Cost of direct materials used in production Direct Labor Factory overhead Rent on Factory facilities Depreciation on Factory equipment Indirect Labor utilities expense (1250017596) Insurance Expense (8500*60%) Total Factory overhead Total Manufacturing cost incurred during January Total Manufacturing cost Less: Work in Process Inventory, Oct 31 Cost of goods Manufactured 20400 21000 264100 285100 35200 249900 189300 61600 32500 28500 9375 5100 137075 576275 596675 14200 582475

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