Raw Mat Opng Stock

Raw Mat Closing Stock

Purchases
Freight
Material Returns
Direct Wages
Direct Expenses
Prod OH / Fact OH / Works OH
WIP Opng Stock
WIP Closing Stock
Admin / Office OH
Fin Good Opng Stock
Fin Good Closing Stock
Sales OH / Marketing OH
Profit
Sales Revenue

Office appliances PnM Buildings

Dep rate

Dep rate -

HLP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Direct Mat -
Prime Cost -
Fact Cost Gross / Works Cost Gross -
Fact Cost Net / Works Cost Net -
Cost of Goods Manufactured (COGM) or Cost of Prodn -
Cost of Goods Sold -
Cost of Sales -
Revenue / Sales - -
Step 1
calculate Prime cost

DM (Materials Purchased + Freight - Returns) + add op. stock - Closing stock

320000
16000
4800
new cost of materials added
140000
180000
291200

DL actual + accrued

160000
8000
168000

DE actual

50000

50000

PC DM+DL+DE

509200

add Factory OH

IL actual + accrued 19200 ind lab

Supervison 10000
R&U 14000
HLP (8/10)*65000 52000
R&T (2/3)*6300 4200
ME 18700
DEP: plant (0.10*460500) 46050 Why depr cost of office app not tak

Build(0.04*200000*8/10) 6400
Factory OH 170550

Work Cost gross (PC+FOH)

679750
do adj for inventory
(add:opening WIP ; less: Closing WIP)
8000
Work Cost Net 687750

Cost of Production 687750

do adj for FG inventory

add opening 80000

COG AFS 767750 av for sale
less closing 115000
COGS 652750
Add non-manufacturing OH

administration OH
HLP(1/10*65000) 6500
R&T(1/3*6300) 2100
Off Sal & Exp 8600
Dep Build(0.04*200000)*1/10
800
Off App (0.05*17500) 875
Total (Admin OH) 18875 admin OH

S&D oh
HLP(1/10*65000) 6500
SC 33600
ST 11000
SP 22500
Dist dept Sal & Exp 18000
Dep: Build(0.04*200000)*1/10
800
Total Sales OH 92400 sales OH

Total Non- manuf OH 111275

Cost of sales 764025

Sales 768000
less returns 14000
net sales 754000
less cost of sales 764025
profit/loss -10025
cost of office app not taken?
Raw Mat Opng Stock 140,000
Raw Mat Closing Stock 180,000
Purchases 320,000
Freight 16,000
Material Returns 4,800
Direct Wages 160,000 8,000
Direct Expenses 50,000
Prod OH / Fact OH / Works OH 46,050 18,000 10,000.00 14,000 52,000
WIP Opng Stock 200,000
WIP Closing Stock 192,000
Admin / Office OH 6,500 2,100 8,600 875 800
Fin Good Opng Stock 80,000
Fin Good Closing Stock 115,000
Sales OH / Marketing OH 6,500 33,600 11,000 22,500 18,000
Profit
Sales Revenue - 14,000 768,000

Office appliances PnM Buildings

Dep rate

Dep rate -

HLP
 140,000.00
180,000.00
320,000.00
16,000.00
4,800.00
168,000.00
50,000.00
4,200 18,700 1,200 6,400 170,549.58
200,000.00
192,000.00
18,874.79
80,000.00
115,000.00
800 92,400.00
-
754,000.00
Direct Mat 291,200.00
Prime Cost 509,200.00
Fact Cost Gross / Works Cost Gross 679,749.58
Fact Cost Net / Works Cost Net 687,749.58
Cost of Goods Manufactured (COGM) or Cost of Prodn 687,749.58
Cost of Goods Sold 652,749.58
Cost of Sales 764,024.37
Revenue / Sales 764,024.37 754,000.00
Raw Mat Opng Stock
Raw Mat Closing Stock
Purchases 180,000
Freight
Material Returns
Direct Wages 160,000
Direct Expenses
Prod OH / Fact OH / Works OH 40,000
WIP Opng Stock
WIP Closing Stock
Admin / Office OH 19,000
Fin Good Opng Stock
Fin Good Closing Stock
Sales OH / Marketing OH
Profit
Sales Revenue

Office appliances PnM Buildings

Dep rate

Dep rate -

HLP
 - Direct Mat 180,000
- Prime Cost 340,000
180,000 Fact Cost Gross / Works Cost Gross 380,000
- Fact Cost Net / Works Cost Net 380,000
- Cost of Goods Manufactured (COGM) or Cost of Prodn 399,000
160,000 Cost of Goods Sold 399,000
- Cost of Sales 399,000
40,000 Revenue / Sales 399,000
-
-
19,000 5%
-
-
-
- 0.25
- 0.05
Solution to problem-2 in Problem set-1
a)
Material used 180,000
Manual and Machine labour Wages directly chargeable 160,000
Prime Cost 340,000
Work Overhead Expenditure 40,000
Work Cost 380,000
Establishment and General Expenses 19,000
Total Cost 399,000
% of overhead cost that bears to manual and machine
labour wages 25%
% that establishment & general expenses bear to the
works cost 5%

b)
Expenditure on Material 8,000
Expenditure on Wages 6,000
Prime Cost 14,000
Work overhead cost @ 25% 1,500
Work Cost 15,500
Establishment and General Expenses @ 5% 775
Total Cost 16,275
Profit 25% on total cost or 20% on selling price 4,069
Price to be quoted 20,344
Solution to problem-3 in Problem set-1
Materials consumed:
Opening inventory 3,000
Purchases of raw material of the year 110,000
113,000
Less: closing inventory 4,000
Direct Material consumed 109,000
Direct labor 65,000
Chargable Expenses/Direct Exp 10,000
Prime cost 184,000
Factory overheads: 50% of direct labor cost 50% 32,500
Factory cost Gross FCG 216,500
Adjustment for work in process
Opening 4,000
Closing 6,000
WIP Inventory adjustments - 2,000
Factory Cost Net FCN 214,500
Add: opening inventory of finished goods 8,000
222,500
Less: closing inventory of finished goods 7,000
Cost of goods sold 215,500
Administration expenses: 10 % of work cost 10% 21,450
Selling expenses: 5% of sales 5% 13,750
Cost of sales 35,200 WRONG IN SEQUENCING
250,700
Sales 275,000
Profit 24,300
SEQUENCING
DM 3,000.00
DL 7,000.00
PC 10,000.00
Fact OH 500.00

Work Cost 10,500.00

WC Net 10,500.00
COGM 10,500.00

Office OH / Admin OH 2,100.00

Sales OH 1,020.00
Cost of goods sold 13,620.00
Sales 17,000.00
PC 2940000 DM 1st Jan 160000
DL 1800000 DM purchased 1600000
DM AFU 1760000
DM used 1140000
DM Used 1140000
CC DL+IND Fac Cost
DM closing 620000
1800000+(0.4*CC)
0.6 Cc + 0.4 CC DM used 1140000
DL Used 1800000
so, DL = 1800000 = 0.6 CC PC 2940000
CC 3000000 IND MOF 1200000
IND FC 1200000
WC gross 4140000

add WIP 1st Jan 340000 STOP here

WIP AFU 4480000

less closing WIP 280000

Cost of Prodiuction 4200000

add Opening FG 1st jan 300000
COG AFS 4500000

less closing FG 500000

COGS 4000000 stage 3
COGS = FCN + Fin Good Adj
4000000

Revenue 5000000 stage 2

margin 20%
COGS 4000000
PS2 Q2 Problem on unit costs, product costs

1)
Production units 100,000 units
Kgs in Production used is 200,000 Kgs
per Kg Direct Materical cost 0.70 Rs/kg
Period Ending Direct Material inventory cost 1,400 Rs 2000 kg given

2)
Manufacturing cost for 100000 units
Variable Fixed Total (Rs)
DM costs 140,000 140,000
DL costs 30,000 30,000
Plant Energy costs 5,000 5,000
Indirect Labor costs 10,000 16000 26,000
Other Indirect manufacting costs 8,000 24000 32,000
Marketing distribution & Customer overhead -
Admin Overhead -
Cost of goods manufactured 193,000 40,000 233,000

Now, Average manufacturing cost 2.33 Rs/unit

Finished goods inventory in units 9,000 units (Rs 20970 given)

3)
Units sold = Initial Inventory +
Production - Ending Inventory 91,000 units

Now, Selling Price per unit 4.80 Rs/unit (Rs. 436800 is given)

4)
ABC manufacturers Income statement
Revenue 436,800

Cost of units sold

Beginning FG cost -
Cost of goods manufactured 233,000
Cost of goods available for sale 233,000
Ending finished goods 20,970 212,030 (Rs 20970 given)
Gross Margin 224,770

Operating Costs
Marketing Dist & customer OH 162,850
Admin OH 50,000 212,850

Operting Income 11,920 Rs

PS2 Q3
ABC manufacturers Income statement
Cost of 9000 finshed goods units 2,880.00
Cost of non inventoriable Indirect Other
manufacturing cost 9,040.00

PS2 Q4 DM inventory as on 30 Sept 2014 = Begin DM inventory + DM purchased - DM used

Begin DM 900
DM purchased 3,600
DM used 3750
DM inventory as on 30 Sept 2014 = 750

WIP inventory as on 30 Sept 2014 = Begin WIP inventory + Total manufacturing costs - COGM
Begin WIP inventory 2,000
Total manufacturing costs 16000
COGM 16,500
WIP inventory as on 30th Sep 2014 1,500

FG inventory as on 30 Sept 2014 = End FG inventory

FG inventory as on 30 Sept 2014 1250

Fixed manufacturing OH = Total manufacturing OH - Variable manufacturing OH

Total manufacturing OH 4800
Variable manufacturing OH 2500
Fixed manufacturing OH 2300

DL for Sept = Total manufacturing costs - DM used - Total manufacturing OH

Total Manufacturing costs 16000
DM 3750
Total Manufac OH 4800
DL for Sept 7450

Goods available for sale in September = Begin FG inventory + Cost of goods manufactured
Begin FG inventory 1750
Cost of goods manufactured 16500
Goods available for sale in September 18250
 Jan
Cash Balance on 1st Jan 88,000
Jan Sales
120000 Sales 50.00% 60,000
120000 Sales 30.00%
120000 Sales 19.00%
78000 Purchase 3.00%
24000 Expenses - Depriciation (of 5000) - 19,000
58000 Acc. Receivable (recovery) 35,000
72000 Acc. Payable 3.00% - 69,840

Feb Sales
110000 Sales 50.00%
110000 Sales 30.00%
110000 Sales 19.00%
66000 Purchase 3.00%
24200 Expenses - Depriciation (of 5000)

Mar Sales
125000 Sales 50.00%
125000 Sales 30.00%
125000 Sales 19.00%
81250 Purchase 3.00%
27000 Expenses - Depriciation (of 5000)

Apr Sales
130000 Sales 50.00%
130000 Sales 30.00%
130000 Sales 19.00%
84500 Purchase 3.00%
28600 Expenses - Depriciation (of 5000)

10) a) 94,160
Feb Mar Apr May
94,160

36,000
22,800
- 75,660

23,000

55,000
33,000
20,900
- 64,020
- 19,200

62,500
37,500
23,750
- 78,813
- 22,000

65,000
39,000
24,700
- 81,965
- 23,600

114,000 32,280 20,988 - 19,215

- 94,860
113,300
 0.7
0.15
0.1
0.04

Slide 5, page 62
Jul 30 0.04
Aug 35 0.1
Sep 40 0.15
Oct 45 0.7
Nov 50
Dec 42.5
42.2
 0.04
0.1
0.15
0.7

0.04
0.1 0.04
0.15 0.1
0.7 0.15
0.7
47.15 43.35
Unit Selling Price 500
Unit Var exp 300

Units Sold 500

Sales 250,000
Less Var Exp 150,000
CM 100,000
Less Fix exp 80,000
Net Op income OR Profit 20,000
540
270,000
162,000
108,000
90,000
18,000
1500 : 1100 : 900 : 500 common factors -- 00
15 : 11 : 9 : 5 total = 15+11+9 +5 40
(15/40)*10000 3750 similarly, others and check total =10000

240000 : 180000 : 120000 : 60000 common factors -- 0000 strike it off

24: 18: 12: 6 then, common factor -- 6
4: 3: 2:1 total =10
(4/10)*6000 2400
this time there is no item. But service stores
and you follow the same direct method of distribution

600 & 400 is correct

Stores: Maint: X:Y
Maint: X:Y 348
and so on
 Per unit
PC 10000 0.5
FOH 500 0.025
WC Gross 10500 COP 0.525
AD OH 2100 0.105 .525+.105 0.63
SOH 1080 0.06

FG closing 2000*(.525+.105)