Question

Kamran Company produces various types of fertilizer. No beginning units in process or finished units were on hand on January 1, 2015, 30,000 finished units were on hand on December 31, 2015 and 95,000 units were sold during the year. There were no units in work in process inventory on December 31, 2015. The material put into production cost Rs. 300,000. 75% were direct material. There was no beginning or ending material inventory. Labor costs were Rs. 350,000, 40% was for indirect labor. Factory overhead costs, other than indirect materials and indirect labors were the following:



Heat, light and power Rs. 115,000

Depreciation 78,000

Factory Taxes 65,000

Repairs and Maintenance 42,000

Selling Expenses were Rs. 80,000 general and administrative expenses were Rs. 50,000.



Calculate Cost of Goods Manufactured.

Answer 1

Answer:

Cost of Goods Manufactured   900,000

Step-by-step explanation:

Kamran Company

Cost of Goods Manufactured.

Total Materials Used  Rs 300,000

Direct Materials = 75% of Rs 300,000=  Rs 225,000

Direct Labor= 60% of 350,000=  Rs 210,000

Prime Cost = 435,000

Factory Overhead

Indirect Materials = 75,000

Indirect Labor = 90,000

Heat, light and power Rs. 115,000

Depreciation 78,000

Factory Taxes 65,000

Repairs and Maintenance 42,000

Cost of Good Available for Manufacture : 900,000

Add opening WIP  --- Nil

Less Closing WIP ---Nil

Cost of Goods Manufactured   900,000

Selling Expenses were Rs. 80,000 general and administrative expenses were Rs. 50,000 are used in making Profit & Loss or the income statement.

Beginning and Ending Finished Goods are used in the Cost of Goods Sold Statement.