188 Part-lI. System of Accoun ing for Costs. 5-9. Three Work in Process Accounts, Calculation of Unit Cost. Rehan Factory provides you the following data for the month of June 2014: June 1 4,000 June 30 Rs. 6,000 Rs. Inventories: Materials Work in process Work in process Work in process Finished goods Rs. Rs. 5,000 Rs. 12,000 Rs. 3,000 3,000 Rs. 10,000 Rs. ...*.. Materials Labour Factory overhead --- ..... 1,000 9,000 ...... ..... Rs. .... Rs. 7,000 Manufacturing costs for the month are as follow: Direct materials used Rs. 38,000 Direct labour: Rs. Assembling department @ Rs. 8.00 per hour Finishing department @ Rs. 10.00 per hour Factory overheaL is applied according to following rates: Assembling department @ Rs. 6.00 per direct labour hour. Finishing department @ Rs. 4.00 per direct labour hour. Required: (a) Prepare a cost of goods manufactured and sold statement for the 8,000 Rs. 20,000 month. (b) Calculate unit cost of materials, labour and factory overhead for the production of June assuming that 10,000 units were produced during the month. Check figures: Materials purchased Rs. 40,000, C.G.S. Rs. 84,000, Unit cost of Materials Rs. 4, Unit Cost of Labour Rs. 3, Unit cost of F.O.H. Rs.1.60 (Illustration 5-7 is related to above exercise)
188 Part-lI. System of Accoun ing for Costs. 5-9. Three Work in Process Accounts, Calculation of Unit Cost. Rehan Factory provides you the following data for the month of June 2014: June 1 4,000 June 30 Rs. 6,000 Rs. Inventories: Materials Work in process Work in process Work in process Finished goods Rs. Rs. 5,000 Rs. 12,000 Rs. 3,000 3,000 Rs. 10,000 Rs. ...*.. Materials Labour Factory overhead --- ..... 1,000 9,000 ...... ..... Rs. .... Rs. 7,000 Manufacturing costs for the month are as follow: Direct materials used Rs. 38,000 Direct labour: Rs. Assembling department @ Rs. 8.00 per hour Finishing department @ Rs. 10.00 per hour Factory overheaL is applied according to following rates: Assembling department @ Rs. 6.00 per direct labour hour. Finishing department @ Rs. 4.00 per direct labour hour. Required: (a) Prepare a cost of goods manufactured and sold statement for the 8,000 Rs. 20,000 month. (b) Calculate unit cost of materials, labour and factory overhead for the production of June assuming that 10,000 units were produced during the month. Check figures: Materials purchased Rs. 40,000, C.G.S. Rs. 84,000, Unit cost of Materials Rs. 4, Unit Cost of Labour Rs. 3, Unit cost of F.O.H. Rs.1.60 (Illustration 5-7 is related to above exercise)
Chapter1: Financial Statements And Business Decisions
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:5-9. Three Work in Process Accounts, Calculation of Unit Cost. Rehan Perfume
Factory provides you the following data for the month of June 2014:
Inventories:
Materials
Work in process - Materials
Work in process
Work in process
Finished goods
188 Part-Il. System of Accoun ing for Costs.
June 30
6,000
3,000
Rs. 10,000
1,000
9,000
June 1
4,000
Rs.
Rs.
Rs.
5,000
Rs.
Rs. 12,000
---
Labour
Rs. 3,000
7,000
Rs.
Rs.
Factory overhead
---
Rs.
Manufacturing costs for the month are as follow:
Direct materials used
Rs. 38,000
Direct labour:
Rs.
8,000
Assembling department @ Rs. 8.00 per hour
Finishing department @ Rs. 10.00 per hour
Factory overheaL is applied according to following rates:
Assembling department @ Rs. 6.00 per direct labour hour.
Finishing department @ Rs. 4.00 per direct labour hour.
Required: (a) Prepare a cost of goods manufactured and sold statement for the
Rs. 20,000
month.
(b) Calculate unit cost of materials, labour and factory overhead for the
production of June assuming that 10,000 units were produced
during the month.
Check figures: Materials purchased Rs. 40,000, C.G.S. Rs. 84,000, Unit cost of
Materials Rs. 4, Unit Cost of Labour Rs. 3, Unit cost of F.O.H. Rs.1.60
(Illustration 5-7 is related to above exercise)
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