04-12-2007, 07:54 PM
Q7The following information relates to NBV ltd for the year ended 31 july 2003.
direct materials 160,000
direct labour 200,000
prime cost 360,000
carriage outwards 80,000
depreciation of delivery vehicles 30,000
factory indirect overheads 450,000
increase in work-in-progress stock 75,000
decrease in stock of finished goods 55,000
what would b the factory cost of goods completed for the year ended 31 july 2003?
SUGGESTED ANSWER
FACTORY COST OF COMPLETED GOODS
Direct materials 160,000
Add
Direct labour 200,000
Add
Factory indirect overheads 450,000
Less
Increase in work-in-progress stock (75,000)
Add
Decrease in stock of finished goods 55,000
=
FACTORY COST OF COMPLETED GOODS 790,000
THEREFORE,
FACTORY COST OF COMPLETED GOODS IS 790,000 (CURRENCY UNITS ARE NOT KNOWN).
NOTES
-FOLLOWING ARE SELLING/PERIODIC COSTS AND WILL BE CHARGED TO PROFIT AND LOSS ACCOUNT DIRECTLY. THESE CANNOT BE ABSORBED IN STOCKS VALUES.
Carriage outwards 80,000
Depreciation of delivery vehicles 30,000
-PRIME COST IS THE TOTAL OF DIRECT LABOUR AND DIRECT MATERIAL COST, THEREFORE, IT WAS ALSO NOT RELEVANT BECAUSE BOTH COMPNENTS ARE SEPARATELY TAKEN IN THE ANSWER.
direct materials 160,000
direct labour 200,000
prime cost 360,000
carriage outwards 80,000
depreciation of delivery vehicles 30,000
factory indirect overheads 450,000
increase in work-in-progress stock 75,000
decrease in stock of finished goods 55,000
what would b the factory cost of goods completed for the year ended 31 july 2003?
SUGGESTED ANSWER
FACTORY COST OF COMPLETED GOODS
Direct materials 160,000
Add
Direct labour 200,000
Add
Factory indirect overheads 450,000
Less
Increase in work-in-progress stock (75,000)
Add
Decrease in stock of finished goods 55,000
=
FACTORY COST OF COMPLETED GOODS 790,000
THEREFORE,
FACTORY COST OF COMPLETED GOODS IS 790,000 (CURRENCY UNITS ARE NOT KNOWN).
NOTES
-FOLLOWING ARE SELLING/PERIODIC COSTS AND WILL BE CHARGED TO PROFIT AND LOSS ACCOUNT DIRECTLY. THESE CANNOT BE ABSORBED IN STOCKS VALUES.
Carriage outwards 80,000
Depreciation of delivery vehicles 30,000
-PRIME COST IS THE TOTAL OF DIRECT LABOUR AND DIRECT MATERIAL COST, THEREFORE, IT WAS ALSO NOT RELEVANT BECAUSE BOTH COMPNENTS ARE SEPARATELY TAKEN IN THE ANSWER.
