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Problems Cost+Statement

Accounting 202

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Mitu
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29 views

Problems Cost+Statement

Accounting 202

Uploaded by

Mitu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Cost Statement

RM- Opening 40,000


(+) RM- Purchase 500,000
RM- Available for Use 540,000
(-) RM- Ending 20,000
RM- Used 520,000
(+) Direct Labor 90,000
(+) Manufacturing OH / Factory Overhead 297800
Total Manufacturing Cost 907800
(+) WIP- Opening 60,000
Total WIP 967800
(-) WIP- Ending 30,000
Cost of goods Manufactured 937800
(+) Finished Goods - O 10,000
Cost of goods available for sale 947800
(-) Finished goods – Ending 312600
((937800/30000)*10,000? )
Cost of goods sold 635200

Problem 1
The following information has been taken from the Visic company’s production, sales & cost
records for the just completed year:
Production in Units 30,000
Sales in Units 20,000
Ending finished goods inventory in units 10,000
units
Sales in dollars 10,00,000
Costs:
Advertising 1,15,000
Entertainment & travel 40,000
Direct Labor (40% of conversion cost) 40,000?
Indirect Labor (60%) 60,000
Raw materials purchased 500,000
Building Rent (production uses 60% of the space; 40,000
administrative & sales offices use the rest)
Utilities, factory 108,000
Royalty paid for use of production patent,1.5 per unit produced ?
(30,000*1.5=45000)
Maintenance, factory 9,000
Rent for special production equipment,11000 per year plus ?
0.30 per unit produced (11,000+0.30*30000=
11000+9000=20,000)
Selling & administrative salaries 2,10,000
Other factory overhead costs 6,800
Other selling & administrative expenses 17,000
Beginning of End of
the year Year
Inventories:
Raw materials 40,000 20,000
Work in process 60,000 30,000
Finished goods 10,000 ?
The finished goods inventory is being carried at the average unit production cost for the year.
The selling price of the product is tk. 50 per unit.
Required:
1. Prepare the statement of cost of goods manufactured.
2. Prepare income statement for the year.

Factory Overhead (85,000+24,000+108000+45000+9000+20,000+6800= 297800)


RM- Opening 40,000
(+) RM- Purchase 500,000
RM- Available for Use 540,000
(-) RM- Ending 20,000
RM- Used 520,000
(+) Direct Labor 90,000
(+) Manufacturing OH / Factory Overhead 297800
Total Manufacturing Cost 907800
(+) WIP- Opening 60,000
Total WIP 967800
(-) WIP- Ending 30,000
Cost of goods Manufactured 937800
(+) Finished Goods - O 10,000
Cost of goods available for sale 947800
(-) Finished goods – Ending 312600
((937800/30000)*10,000? )
Cost of goods sold 635200

Income Statement

Revenue 10,00,000
(-) COGs 635,200
Gross Profit 364800
(-) Operating Expense

Selling & Administrative 398,000

Net Loss 33200


Problem 2
A distraught employee, Fang W. Arson, put a torch to manufacturing plant on a blustery
February 26. The resulting blaze destroyed the plant and its contents. Fortunately, certain
accounting records were kept in another building. They reveal the following for the period from
January 1, 2010 to February 26,2010.
Direct materials purchased 160,000
Work in process 1/1/2010 34,000
Direct materials 1/1/2010 16,000
Finished goods 1/1/2010 30,000
Indirect manufacturing costs 40 % of conversion costs
120,000
Revenues 5,00,000
Direct manufacturing labor 1,80,000
Prime costs 2,94,000
Gross margin percentage based on revenues 20%
Cost of goods available for sale 4,50,000
Required: Calculate the cost of :i. Finished goods inventory 26/2/2010.ii.Work in process
inventory 26/2/2010.iii. Direct materials inventory 26/2/2010.

Revenue 500000
(-) Cost of goods sold 400,000
Gross Profit 100,000
DM 114,000
DL 180,000
Prime Cost 294000

DL 180,000 60%
Indirect manufacturing cost / Factory OH 120,000 40%
Conversion Cost 300,000 100%

RM- Opening 16000

(+) RM- Purchase 160000


RM- Available for Use 176000
(-) RM- Ending 62,000
RM- Used 114,000
(+) Direct Labor 180000
(+) Manufacturing OH / Factory Overhead (W-1) 120,000
Total Manufacturing Cost 414000
(+) WIP- Opening W-I-P 34000
Total WIP 448000
(-) WIP- E 28,000
Cost of goods Manufactured 420,000
(+) Finished Goods - O F/G 30,000
Cost of goods available for sale 450,000
(-) Finished goods – Ending 50,000
Cost of goods sold 400000

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