From the following information prepare a cost statement clearly showing the various components of the cost of production (20 Marks) Sh. stock on 1st January 2007 48,000 Raw materials 9,800 work in...

      

From the following information prepare a cost statement clearly showing the various components of the cost of production (20 Marks)

Sh.
stock on 1st January 2007 48,000
Raw materials 9,800
work in progress 120,000
finished goods 148,000
wages paid to the factory workers 52,000
factory insurance 400,000
plant balance on 1st January 2007 180,000
factory rent 200,000
cleaning costs 350,000
purchase of raw materials
stocks at 31st December 2007
Raw materials 21,000
work in progress 6,000
carriage on raw materials 42,000
return of raw materials to suppliers 6,200
salary of marketing manager 200,000
fixed admission expenses 140,000
salesman commission 60,000

  

Answers


Erick
The cost of production is sh 996,600. Raw materials returns to the suppliers of sh 6,200 and the closing raw materials of 21000 are removed from the cost of raw materials. The cost of production is adjusted with the opening and closing work in progres to arrive at the cost of producing complete goods. Sales commission, fixed admission and marketing manager salary expense are not production cost hence not included. The cost statement is attached.
Munekare answered the question on June 26, 2018 at 12:15

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