Question

Following information is extracted from the books of a manufacturing concern on 31st December
Opening stock of raw material 13,000
Furniture and Fixtures 72,000
Plant and Machinery 98,000

Bank charges 5,453
Cash in hand 12,800
Cost of material available for use 62,000
Opening inventory of finished
goods 8,000
Cost of direct material used 50,000
Sundry creditors 54,000 Direct labour cost 10,000
Sundry debtors 20,000 Factory overhead cost 5,000
Loan taken from bank 44,300
Sales 85,000
Cost of goods available for sale 75,000
Gross profit 21,000

Required:
Based on the above information, you are required to calculate the amount of:
1. Purchases
2. Prime cost
3. Cost of goods manufactured
4. Conversion cost
5. Cost of goods sold

Answer 1

	Cost Sheet
	Opening Stock of Raw material	13,000	given in Question
	Add: Purchases	49,000	Balancing Figure	(62000-13000)
	Cost of Material avialable for use	62,000	given in Question
	Less:Closing Stock of Raw Material	12,000	Balancing Figure	(62000-50000)
	Cost of Direct material Used	50,000	given in Question
	Add: Direct Labour	10,000	given in Question
	Prime Cost	60,000
	Add: Factory Over Head	5,000	given in Question
	Factory Cost	65,000
	Add: other Overhead	2,000	Balancing Figure
	Cost of Production	67,000
	Add:Opening Stock of finished Goods	8,000	given in Question
	Cost Of Goods Available for Sale	75,000	given in Question
	Less:Closing Stock of Finished Goods	11,000	Balancing Figure	(75000-64000)
	Cost Of Goods Sold***	64,000
	***
	Sales	85,000
	Less:Gross Profit	21,000
	Cost of Goods Sold	64,000
	Convertion Cost = Direct Labour + Manufacturing Over Head
	Direct Labour	10,000
	Manufacturing Over Head	7,000	(5000+2000)
		17,000