Question

Duc Manufacturing Ltd had the following account balances at the end of 2019 financial year.

	Balance
Finished Goods-1 January 2019	$125,000
Work in Process-1 January 2019	33,200
Raw Materials1- January 2019	7,500
Prepaid Factory Rent	60,000
Insurance Expense-Office	5,000
Freight-in	12,500
Office Supplies on hand	2,500
Factory Rent Expense	35,000
Sales	1,750,000
Direct Labour	113,000
Raw Materials Purchases	325,520
Office Supplies Expense	1,500
Indirect Labour	75,300
Factory Supplies	12,650
Depreciation Expense-Office Vehicles	10,000
Electricity and Gas-Factory	82,150
Raw material purchase return & allowances	23,370
Factory Insurance	11,500
Sales Commissions	72,700
Office Salaries	42,000
Depreciation Expense-Machinery	135,000
Interest Expense	10,000

Additional information relating to the company is as follows:

1. The inventories as of 31 December 2019 were:

Raw materials $ 24,150

Work in process $ 37,500

Finished goods $172,500

2. Expenses incurred as of end of the year but not yet recorded were: direct labour $17,000 and office salaries, $2,300.
3. On 1 September 2019 the company paid $60,000 for the next 12 months factory rent and recorded this amount in the Prepaid Factory Rent Account.
4. At the end of the year the office supplies on hand available was $500

Required: Prepare a cost of goods manufactured statement for 31 December 2019.

Answer 1

Cost of goods manufactured for statement for 31 December 2019
Particular	Amount
Raw-material opening inventory	7,500.00
Purchases	338,020.00
Purchase return	23,750.00
Raw-material available for use	321,770.00
Raw-material closing inventory	24,150.00
Raw material used	297,620.00
Direct labour	130,000.00
Prime Cost	427,620.00
FOH
Indirect labour	75,300.00
Indirect material	-
Depreciation	145,000.00
Utilities	161,300.00
Others	-
Manufacturing cost	809,220.00
WIP (opening)	33,200.00
Cost of goods to be manufactured	842,420.00
WIP (ending)	37,500.00
Cost of goods manufactured	804,920.00
Utilities
Rent	55,000.00
Insurance	11,500.00
Factory supplies	12,650.00
Electricity and gas	82,150.00
Total	161,300.00
*20000 from prepaid rent is considered in expense
*office supplies are not part of manufacturing cost
*office salary is not part of manufacturing cost
*sales commission is not part of manufacturing cost
*interest expense is not part of manufacturing cost *Freight is included in Purchases