MS KP MM Corporation is a manufacturer that produces cosmetics. The following information has been taken from the company’s production, sales, and cost records for the just completed year: Production in units 100,000 Sales in units ? Ending finished goods Inventory in units ? Sales in Rupees Rs 2,000,000 Costs: Other selling and administrative expenses Rs 40,000 Other factory overhead costs Rs 22,000 Selling and administrative salaries Rs 240,000 Maintenance Factory Rs 50,000 Utilities factory Rs 60,000 Building Rent (Production Uses 80% of the Space; administrative and sales offices use the rest) Rs 100,000 Royalty paid for use of Production patent, Rs 0.5 per unit produced) ? Rent for special production equipment, Rs 5000 per year plus Rs 0.2 per unit produced) ? Insurance factory equipment Rs 20,000 Cleaning supplies, factory Rs 10,000 Depreciation Factory Rs 18,000 Advertising cost Rs 600,000 Direct labor Rs 80,000 Indirect labor Rs 20,000 Property taxes, factory Rs 10,000 Raw material purchased Rs 200,000 Inventories Beginning of year End of year Finished goods Rs. 0 ? Work in process Rs 50,000 Rs 60,000 Raw materials Rs 20,000 Rs 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 Rs 32 per unit. Required: A. Prepare a Cost of Goods Manufactured Statement for the year. B. Compute the number of units and cost of units in the finished goods inventory at the end of the year. C. Prepare an Income Statement for the year under Absorption costing Method. D. Compute the following cost: i. Prime cost ii. Conversion cost iii. Inventoriable cost iv. Non-Manufacturing cost E. Prepare T accounts of the following i. Work in process ii. Finished goods

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter2: Basic Managerial Accounting Concepts

Section: Chapter Questions

Problem 58P: Cost of Goods Manufactured, Income Statement W. W. Phillips Company produced 4,000 leather recliners...

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MS KP MM Corporation is a manufacturer that produces cosmetics. The following information has been taken from the company’s production, sales, and cost records for the just completed year:

Production in units	100,000
Sales in units	?
Ending finished goods Inventory in units	?
Sales in Rupees	Rs 2,000,000
Costs:
Other selling and administrative expenses	Rs 40,000
Other factory overhead costs	Rs 22,000
Selling and administrative salaries	Rs 240,000
Maintenance Factory	Rs 50,000
Utilities factory	Rs 60,000
Building Rent (Production Uses 80% of the Space; administrative and sales offices use the rest)	Rs 100,000
Royalty paid for use of Production patent, Rs 0.5 per unit produced)	?
Rent for special production equipment, Rs 5000 per year plus Rs 0.2 per unit produced)	?
Insurance factory equipment	Rs 20,000
Cleaning supplies, factory	Rs 10,000
Depreciation Factory	Rs 18,000
Advertising cost	Rs 600,000
Direct labor	Rs 80,000
Indirect labor	Rs 20,000
Property taxes, factory	Rs 10,000
Raw material purchased	Rs 200,000

Inventories	Beginning of year	End of year
Finished goods	Rs. 0	?
Work in process	Rs 50,000	Rs 60,000
Raw materials	Rs 20,000	Rs 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 Rs 32 per unit.

Required:
A. Prepare a Cost of Goods Manufactured Statement for the year.
B. Compute the number of units and cost of units in the finished goods inventory at the end of the year.
C. Prepare an Income Statement for the year under Absorption costing Method.
D. Compute the following cost:
i. Prime cost
ii. Conversion cost
iii. Inventoriable cost
iv. Non-Manufacturing cost
E. Prepare T accounts of the following
i. Work in process
ii. Finished goods

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