Mgt402 Solution
Thursday, April 29, 2010 Posted In MGT Edit ThisChina Toys Manufacturing Company Ltd.,
Cost of Goods Manufactured and Sold Statement.
For the period ended on 31st Dec, 2009
Particulars | Rs. | Rs. |
Direct Material | ||
Opening Material | 8000 | |
+Material Purchased | +90000 | |
Material Available for use | 98000 | |
-Closing Inventory | -43000 | |
Material Consumed | 55000 | |
+Direct Labour | +35000 | |
Prime Cost 60% of C.G.M (W-3) | 90000 | |
+FOH 30% of the Conversion (W-2) | +15000 | |
Total Factory Cost | 105000 | |
+Opening Work in Process | +70000 | |
Cost of Goods to be Manufactured | 175000 | |
-Closing Work in Process | -25000 | |
Cost of Goods Manufactured | 150000 | |
+Opening Finished Goods | +50000 | |
Cost of Goods Available for | 200000 | |
-Closing Finished Goods | -48800 | |
Cost of Goods Sold (W-1) | 151200 |
China Toys Manufacturing Company Ltd.,
Income Statement.
For the period ended on 31st Dec, 2009 Particulars | Rs. | Rs. |
218800 | ||
-Sales Return | -28000 | |
Net | 216000 | |
-Cost of Goods Sold | -151200 | |
Gross Profit | 64800 | |
-Selling and Administration Expenses | ||
Selling Expenses 5% of Net | 10800 | |
-Administration Expenses 8% of Net | 17280 | 28080 |
Operating Profit | 36720 | |
-Financial Expenses | -600 | |
Net Profit | 36120 |
(W-1)
Net Sale
Net Sale
216000= Cost of Goods Sold+30% of Sale
216000= Cost of Goods Sold+30% of 216000
216000= Cost of Goods Sold+64800
216000-64800 = Cost of Goods Sold
151200 = Cost of Goods Sold
(W-2) Reverse Calculation:-
Conversion Cost = Direct Labour + Factory Over Head
Conversion Cost =70%+30%
Conversion Cost =70%35000+30% of Conversion Cost
Total Conversion Cost = 35000*100/70
Total Conversion Cost 35000*100/70
Total Conversion Cost = 50000
Factory Overhead = 30%of 50000
Factory Overhead = 50000*30/100
Factory Overhead = 15000
Working.3:
Ending Finished Goods Inventory=?
Ending Finished Goods Inventory=
Cost of goods available for sale-Cost of Goods Sold
Ending Finished Goods Inventory= Rs.200,000-Rs.151,200
Ending Finished Goods Inventory=Rs.48800
Working.4:
Cost of Goods Manufactured=?
Cost of Goods Manufactured= Cost of goods available for sale-Opening Finished Goods Inventory
Cost of Goods Manufactured= Rs.200,000-Rs.50,000
Cost of Goods Manufactured= Rs.150,000
Working.5:
Prime Cost=?
In the given statement of Question there is Prime cost (60% of Cost of Goods Manufactured)
SO,
Prime Cost= Rs.150,000*60%
Prime Cost= Rs. 90,000
Working.6:
Total Current Factory Cost=?
Total Current Factory Cost=
Prime Cost +Factory Over Head Cost
Total Current Factory Cost= Rs.90,000+Rs.15,000
Total Current Factory Cost= Rs.105,000
Working.7:
Cost Of Goods to be Manufactured=?
Cost Of Goods to be Manufactured=
Total Current Factory Cost+ Opening Work in Process Inventory
Cost Of Goods to be Manufactured= Rs.105,000+Rs.70,000
Cost Of Goods to be Manufactured= Rs.175,000
Working.8:
Ending Work in Process Inventory=?
Ending Work in Process Inventory=
Cost Of Goods to be Manufactured-Cost Of Goods Manufactured
Ending Work in Process Inventory=Rs.175000-Rs.150,000
Ending Work in Process Inventory= Rs. 25,000
Working.9:
Direct Material used=?
Direct Material used= Prime Cost - Direct Labor
Direct Material used= Rs.90,000 – Rs.35,000
Direct Material used= Rs.55,000
Working.10:
Material Closing Inventory=?
Material Closing Inventory=
Material available for use – Total material used
Material Closing Inventory= Rs.98,000 – Rs55,00
Material Closing Inventory= Rs.43,000
