Page 274 - Microsoft Word - 00 BA3 IW Prelims STUDENT.docx

Chapter 15

Example 1: Solution

Manufacturing account of GCH for the year ended 31 December 20X4
$ $
Opening inventory of raw materials
Purchases of raw materials
–––––––

Closing inventory of raw materials
–––––––
Raw materials consumed
Direct manufacturing wages
Direct factory fuel and power
Royalty payable
–––––––
Prime cost
Production overhead:
Factory supervisors' wages
Heat and light
Rent
–––––––

–––––––
Factory costs incurred
Opening work in progress
Closing work in progress
–––––––

–––––––
Factory cost of goods completed
–––––––
Note: The closing value of raw materials, work in progress and finished goods
at 31 December 20X4 will be included in the statement of financial position at
that date.

268