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Nikam Sdn Bhd (NSB) manufactures small camping tents. NSB produced 3,000 units during the year. These camping tents sell for RM150 each. NSB had 500 units in finished goods inventory at the beginning of the year. At the end of the year,there were 800 units in finished goods inventory. The following information was supplied by its accountant: Direct labour cost Purchases of raw materials Depreciation of machinery Insurance expenses Factory rent Factory supervision Utilities expenses Indirect labour cost Administration salaries Sales Commission Advertising Materials inventory, May 1 Work in process inventory, May 1 Finished goods inventory, May 1 Materials inventory, May 31 Work in process inventory, May 31 Finished goods inventory, May 31 Additional information: 10,500 15,000 1,000 4,500 2,000 3,000 2,500 3,500 15,000 12,000 20,000 c)Prepare an income statement. 6,000 12,000 2,100 8,000 7,000 800 Only 70% of the utilities expense and 80% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities. Required: a) Compute prime cost, manufacturing cost and cost of goods manufactured. b) Compute cost of goods sold.

Nikam Sdn Bhd (NSB) manufactures small camping tents. NSB produced 3,000 units during the year. These camping tents sell for RM150 each. NSB had 500 units in finished goods inventory at the beginning of the year. At the end of the year,there were 800 units in finished goods inventory. The following information was supplied by its accountant: Direct labour cost Purchases of raw materials Depreciation of machinery Insurance expenses Factory rent Factory supervision Utilities expenses Indirect labour cost Administration salaries Sales Commission Advertising Materials inventory, May 1 Work in process inventory, May 1 Finished goods inventory, May 1 Materials inventory, May 31 Work in process inventory, May 31 Finished goods inventory, May 31 Additional information: 10,500 15,000 1,000 4,500 2,000 3,000 2,500 3,500 15,000 12,000 20,000 c)Prepare an income statement. 6,000 12,000 2,100 8,000 7,000 800 Only 70% of the utilities expense and 80% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities. Required: a) Compute prime cost, manufacturing cost and cost of goods manufactured. b) Compute cost of goods sold.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Nikam Sdn Bhd (NSB) manufactures small camping tents. NSB produced 3,000 units during the year. These camping tents sell for RM150 each. NSB had 500 units in finished goods inventory at the beginning of the year. At the end of the year, there were 800 units in finished goods inventory. The following information was supplied by its accountant: Direct labour cost Purchases of raw materials Depreciation of machinery Insurance expenses Factory rent Factory supervision Utilities expenses Indirect labour cost Administration salaries Sales Commission Advertising Materials inventory, May 1 Work in process inventory, May 1 Finished goods inventory, May 1 Materials inventory, May 31 Work in process inventory, May 31 Finished goods inventory, May 31 Additional information: b) Compute cost of goods sold. 10,500 15,000 1,000 4,500 2,000 3,000 2,500 3,500 15,000 12,000 20,000 6,000 12,000 2,100 c)Prepare an income statement. 8,000 7,000 Only 70% of the utilities expense and 80% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities. Required: a) Compute prime cost, manufacturing cost and cost of goods manufactured. 800
Transcribed Image Text:Nikam Sdn Bhd (NSB) manufactures small camping tents. NSB produced 3,000 units during the year. These camping tents sell for RM150 each. NSB had 500 units in finished goods inventory at the beginning of the year. At the end of the year, there were 800 units in finished goods inventory. The following information was supplied by its accountant: Direct labour cost Purchases of raw materials Depreciation of machinery Insurance expenses Factory rent Factory supervision Utilities expenses Indirect labour cost Administration salaries Sales Commission Advertising Materials inventory, May 1 Work in process inventory, May 1 Finished goods inventory, May 1 Materials inventory, May 31 Work in process inventory, May 31 Finished goods inventory, May 31 Additional information: b) Compute cost of goods sold. 10,500 15,000 1,000 4,500 2,000 3,000 2,500 3,500 15,000 12,000 20,000 6,000 12,000 2,100 c)Prepare an income statement. 8,000 7,000 Only 70% of the utilities expense and 80% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities. Required: a) Compute prime cost, manufacturing cost and cost of goods manufactured. 800
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