Page 409 - Microsoft Word - 00 BA3 IW Prelims STUDENT.docx

Answers to questions

Example 1: Solution

Manufacturing account of GCH for the year ended 31 December 20X4
$ $
Opening inventory of raw materials 11,000
Purchases of raw materials 256,000
–––––––
267,000
Closing inventory of raw materials (17,000)
–––––––
Raw materials consumed 250,000
Direct manufacturing wages 203,080
Direct factory fuel and power 91,000
Royalty payable 4,000
–––––––
Prime cost 548,080
Production overhead:
Factory supervisors' wages 13,325
Heat and light 4,500
Rent 3,000
–––––––
20,825
–––––––
Factory costs incurred 568,905
Opening work in progress 16,000
Closing work in progress (18,000)
–––––––
(2,000)
–––––––
Factory cost of goods completed 566,905
–––––––
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.

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