Mgt402 Assignment No. 1 Solution
Tuesday, October 26, 2010 Posted In MGT Edit ThisPROBLEM: On March 01, 2008, FC Corporation had 250 gallons of material in store at Rs. 5.00 per gallon. Following were the receipt and issues during March: March 03: Purchased 1,200 gallons @ Rs. 10 per gallon. March 07: Issued 650 gallons to job #2325 March 13: 150 gallons were returned to store room. March 29: Returned to supplier 80 gallons which was purchased on March 3. Additional Information: During that period, factory worked for 1,000 direct labour hours. Direct labour was Rs. 9,325 and factory overhead applied rate is Rs. 6.00 per direct labour hour. Actual factory over head for that period was Rs. 7,500. Following are the year end inventories: Work in process Rs. 2,450 Finished goods Rs. 4,530 There were no beginning inventories for Work in process and finished goods. Required: 1. Prepare Material Ledger Card under FIFO costing method. (10 Marks) 2. Prepare Cost of Goods Sold Statement under FIFO. (5 Marks) Note: Cost of Goods Sold for the period is adjusted for under or over applied factory overhead. |
Solution;
1.
date | received | issued | Balance | ||||||
Gallons of material | Unit cost | amount | Gallons of material | Unit cost | amount | Gallons of material | Unit cost | amount | |
2008 | Rs | Rs | Rs | Rs | Rs | Rs | |||
MAR.1 | 250 | 5.00 | 1250 | ||||||
MAR.3 | 1200 | 10 | 12000 | 250 1200 | 5.00 10 | 1250 12000 | |||
MAR.7 | 250 400 650 | 5.00 10 | 1250 4000 | 800 | 10 | 8000 | |||
MAR13 | 150 | 10 | 1500 | 150 800 | 10 10 | 1500 8000 | |||
80 | 10 | 800 | 70 800 | 10 10 | 700 8000 | ||||
MAR29 | |||||||||
MAR29 | 870 | 10 | 8700 | ||||||
CLOSING INVENTORY ACCORDING TO FIFO IS RS8700.
2.
RUPEES
OPNING INVENTORY =250*5=1250
ADD. NET PURCHASES =(1200*10)-(80*10)
=12000-800
=11200
MATERIAL AVAILABLE FOR USE =1250+11200=12450
LESS. CLOSING INVENTORY =12450-8700
DIRECT MATERIAL CONSUMED =3750
ADD.DIRECT LABOUR COST =3750+9325
PRIME COST =13075
ADD.F.O.H =13075*(1000*6)
TOTAL FACTORY COST =19075
COST OF GOODS TO BE MANUFECTURED=19075
LESS.CLOSING WORK IN PROCESS =19075-2450
COST OF GOODS MANUFECTURED =16625
COST OF GOODS TO BE SOLD= =16625
LESS.CLOSING FINISHED GOODS =16625-4530
COST OF GOOD TO SOLD AT NORMAL=12095
ADD UNDER APPLIED FACTORY OVERHEADS=12095+1500
COST OF GOOD SOLD AT ACTUAL =13595
SUPPORTING CALCULATION
ACTUAL FACTORY OVERHEADS =7500
APPLIED FACTORY OVERHEADS =6000
UNDER APPLIED FACTORY OVERHEADS =1500
