Question

The XYZ manufacturing company shows the following account balances for the financial year 2013. Calculate the cost of goods manufactured and the cost of goods sold (in $ 000).

                                                                                                $‘000

Depreciation plant and equipment                           32

Direct materials inventory 1.1.13                                 9

Direct material purchases                                             57

Finished goods inventory 1.1.13                                 12

Indirect materials used                                                  14

Plant repairs and maintenance                                   18

Direct manufacturing labour                                        72

Plant utilities                                                                      31

Fire insurance plant                                                           8

General administrative costs                                       21

Marketing and advertising                                            18

Depreciation plant building                                          14

Customer service cost                                                       9

Work in progress inventory 1.1.13                            18

Work in progress inventory 31.12.13                       22

Finished goods inventory 31.12.13                            24

Direct materials inventory 31.12.13                            7

Indirect manufacturing labour                                    16

Plant supervision                                                              17

Miscellaneous plant overhead                                    30

Answer 1

Schedule of cost of goods manufactured
Direct Materials used
Direct materials inventory 1.1.13	9
Add: Direct material purchases	57
Total direct materials available	66
Less: Direct materials inventory 31.12.13	(7)
Total direct materials used		59
Direct manufacturing labour		72
Manufacturing Overhead:
Depreciation plant and equipment	32
Indirect materials used	14
Plant repairs and maintenance	18
Plant utilities	31
Fire insurance plant	8
Depreciation plant building	14
Indirect manufacturing labour	16
Plant supervision	17
Miscellaneous plant overhead	30
Total manufacturing Overhead		180
Total Manufacturing Costs		311
Add: Work in progress inventory 1.1.13		18
		329
Less: Work in progress inventory 31.12.13		(22)
Cost of goods manufactured		307
Schedule of cost of goods sold
Finished goods inventory 1.1.13	12.00
Add: Cost of goods manufactured	307
Total finished goods available for sale	319.00
Less: Finished goods inventory 31.12.13	-24
Cost of goods sold	295.00