mgt402 assignment 1 solution fall 2019
Topics to be covered: Inventory Costing Method, Cost of Goods Sold Statement
After going through this assignment, the students should be able to prepare:
- Store ledger card under FIFO perpetual inventory valuation method Cost of goods sold statement
ABC is a manufacturing concern of leather products. Management manufactured 500 leather bags to fill an order by incurring following costs.
Following information has been extracted the books of company to prepare material ledger card for the month of December.
|December 01:||Company had 1,500 kg material @ Rs. 10 per kg|
|December 04:||Purchased material of 2,000 kg @ Rs. 11 per kg|
|December 13:||Issued 2,500 kg material|
|December 19:||Purchased material of 500 kg @ Rs. 12 per kg|
|December 29:||Issued 900 kg material|
- Direct labor cost incurred during the period was Rs. 50,000. Factory overhead applied rate was Rs. 50 per direct labor hour and direct labor hours were 800.
- Ending inventory in finished goods and work in process were Rs. 10,000 and Rs.15, 000 respectively. There was no beginning inventory in finished goods and work in process.
- Prepare Material Ledger Card by using first in first out (FIFO) inventory valuation method under perpetual inventory system.
- Prepare Cost of Goods Sold Statement for the month of December.
Note: Provide working in proper format otherwise marks will be deducted.
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RULES FOR MARKING
Please note that your assignment will not be graded or graded as Zero (0), if:
- It is submitted after the due date.
- Provide complete working and formulas where necessary.
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|DATE||RECEIPTS||ISSUES||Value of Stock|
|Opening stock Raw Material||15,000|
|Closing stock Raw Material||(7,100)|
|Cost of material consumed||35,900|
|Total Factory Cost||125,900|
|Closing work in progress||(15,000)|
|Cost of good manufactured||110,900|
|Closing finishing goods||(10,000)|
|Cost of goods sold||100,900|