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Required: a) Compute prime cost, manufacturing cost and cost of goods manufactured. b) Compute cost of goods sold.

Required: a) Compute prime cost, manufacturing cost and cost of goods manufactured. b) Compute cost of goods sold.

Managerial Accounting: The Cornerstone of Business Decision-Making
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 54P: Preparation of Income Statement: Manufacturing Firm Laworld Inc. manufactures small camping tents....
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Question 3 Bonika Sdn Bhd (BSB) manufactures small camping tents. BSB produced 3,000 units during the year. These camping tents sell for RM150 each. BSB had 500 units in finished goods inventory at the beginning of the year At the end of the year, there were 800 units in finished goods inventory. The following information was supplied by its accountant: RM Direct labour cost 10,500 Purchases of raw materials 15,000 Depreciation of machinery 1,000 Insurance expenses 4,500 Factory rent 2,000 Factory supervision 3,000 Utilities expenses 2,500 Indirect labour cost 3,500 Administration salaries 15,000 Sales Commission 12,000 Advertising 20,000 Materials inventory, May 1 6,000 Work in process inventory, May 1 12,000 Finished goods inventory, May 1 Materials inventory, May 31 2,100 ৪,000 Work in process inventory, May 31 7,000 Finished goods inventory, May 31 800 Additional information: Only 70% of the utilities expense and 80% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities. Required: a) Compute prime cost, manufacturing cost and cost of goods manufactured. b) Compute cost of goods sold.
Transcribed Image Text:Question 3 Bonika Sdn Bhd (BSB) manufactures small camping tents. BSB produced 3,000 units during the year. These camping tents sell for RM150 each. BSB had 500 units in finished goods inventory at the beginning of the year At the end of the year, there were 800 units in finished goods inventory. The following information was supplied by its accountant: RM Direct labour cost 10,500 Purchases of raw materials 15,000 Depreciation of machinery 1,000 Insurance expenses 4,500 Factory rent 2,000 Factory supervision 3,000 Utilities expenses 2,500 Indirect labour cost 3,500 Administration salaries 15,000 Sales Commission 12,000 Advertising 20,000 Materials inventory, May 1 6,000 Work in process inventory, May 1 12,000 Finished goods inventory, May 1 Materials inventory, May 31 2,100 ৪,000 Work in process inventory, May 31 7,000 Finished goods inventory, May 31 800 Additional information: Only 70% of the utilities expense and 80% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities. Required: a) Compute prime cost, manufacturing cost and cost of goods manufactured. b) Compute cost of goods sold.
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