1. A manufacturing organization sold finished goods for Rs. 800,000 during 2018. There was no return of finished goods during the year from customers and no sales discount was allowed. The net income for the year ended Dec. 31, 2018 was 10% of net sales and selling and administrative expenses incurred during the year were 15% and 20% of net sales respectively. The finished goods inventory as at Jan. 1, 2018 was Rs. 60,000 and finished goods inventory as at Dec. 31, 2018 was 50% more than finished goods inventory as at Jan. 1, 2018. The work in process inventory as at Jan. 1, 2018 was Rs. 70,000 and work in process inventory as at Dec. 31, 2018 was 60% of work in process inventory as at Jan. 1, 2018. The conversion cost incurred during the year was Rs. 270,000 and factory overhead cost incurred during the year was 80% of direct labour cost incurred during the year. The indirect material used during the year was Rs. 22,000. The material inventory as at Dec. 31, 2018 was Rs. 60,000 which was Rs. 10,000 more than material inventory as at Jan. 1, 2018. Whenever the material was purchased during the year it was purchased for cash and no inventory was returned to the suppliers of material during the year. Material was purchased multiple times during the year and total transportation charges which were paid during the year were Rs. 5000. Required: Calculate the following: a. Cost of goods sold for the year ended Dec. 31, 2018 b. Cost of goods manufactured during the year ended Dec. 31, 2018 c. Total manufacturing cost incurred during 2018 (12)
1. A manufacturing organization sold finished goods for Rs. 800,000 during 2018. There was no return of finished goods during the year from customers and no sales discount was allowed. The net income for the year ended Dec. 31, 2018 was 10% of net sales and selling and administrative expenses incurred during the year were 15% and 20% of net sales respectively. The finished goods inventory as at Jan. 1, 2018 was Rs. 60,000 and finished goods inventory as at Dec. 31, 2018 was 50% more than finished goods inventory as at Jan. 1, 2018. The work in process inventory as at Jan. 1, 2018 was Rs. 70,000 and work in process inventory as at Dec. 31, 2018 was 60% of work in process inventory as at Jan. 1, 2018. The conversion cost incurred during the year was Rs. 270,000 and factory overhead cost incurred during the year was 80% of direct labour cost incurred during the year. The indirect material used during the year was Rs. 22,000. The material inventory as at Dec. 31, 2018 was Rs. 60,000 which was Rs. 10,000 more than material inventory as at Jan. 1, 2018. Whenever the material was purchased during the year it was purchased for cash and no inventory was returned to the suppliers of material during the year. Material was purchased multiple times during the year and total transportation charges which were paid during the year were Rs. 5000. Required: Calculate the following: a. Cost of goods sold for the year ended Dec. 31, 2018 b. Cost of goods manufactured during the year ended Dec. 31, 2018 c. Total manufacturing cost incurred during 2018 (12)
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
Problem 33BE
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Transcribed Image Text:1. A manufacturing organization sold finished goods for Rs. 800,000 during 2018. There was no
return of finished goods during the year from customers and no sales discount was allowed. The
net income for the year ended Dec. 31, 2018 was 10% of net sales and selling and administrative
expenses incurred during the year were 15% and 20% of net sales respectively. The finished
goods inventory as at Jan. 1, 2018 was Rs. 60,000 and finished goods inventory as at Dec. 31,
2018 was 50% more than finished goods inventory as at Jan. 1, 2018. The work in process
inventory as at Jan. 1, 2018 was Rs. 70,000 and work in process inventory as at Dec. 31, 2018
was 60% of work in process inventory as at Jan. 1, 2018. The conversion cost incurred during the
year was Rs. 270,000 and factory overhead cost incurred during the year was 80% of direct
labour cost incurred during the year. The indirect material used during the year was Rs. 22,000.
The material inventory as at Dec. 31, 2018 was Rs. 60,000 which was Rs. 10,000 more than
material inventory as at Jan. 1, 2018. Whenever the material was purchased during the year it
was purchased for cash and no inventory was returned to the suppliers of material during the
year. Material was purchased multiple times during the year and total transportation charges
which were paid during the year were Rs. 5000.
Required:
Calculate the following:
a. Cost of goods sold for the year ended Dec. 31, 2018
b. Cost of goods manufactured during the year ended Dec. 31, 2018
c. Total manufacturing cost incurred during 2018
d. Direct labour and factory overhead cost incurred during 2018
e. Direct material used during 2018
f. Gross purchase of material during 2018
(12)
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