Philips Sdn Bhd produced 1,500 television stands in August 2021. These stands are sold for RM300 each. Philips Sdn Bhd had 30,000 stands in the finished goods inventory at the beginning of August 2021. At the end of August there were 42,500 stands in the finished goods inventory. The following cost information relates to the month of August 2021: Purchased of raw material 120,000 Beginning material inventory 17,500 Ending material inventory 25,000 Direct labour 75,000 Indirect labour 15,000 Factory rental 15,500 Depreciation on machinery 22,500 Factory utilities 4,500 Factory supervision 33,700 Sales commission 67,500 Administrative expenses 112,500 Beginning work in process inventory 4,000 Ending work in process inventory 5,500 Beginning finished goods inventory 30,000 Ending finished goods inventory 42,500 Requirement: Prepare statement of profit and loss Analyse what happen if the demand of television stands drops? Advise Philips Sdn Bhd the best available method to assign cost for production.
Philips Sdn Bhd produced 1,500 television stands in August 2021. These stands are sold for RM300 each. Philips Sdn Bhd had 30,000 stands in the finished goods inventory at the beginning of August 2021. At the end of August there were 42,500 stands in the finished goods inventory. The following cost information relates to the month of August 2021:
|
Purchased of raw material |
120,000 |
|
Beginning material inventory |
17,500 |
|
Ending material inventory |
25,000 |
|
Direct labour |
75,000 |
|
Indirect labour |
15,000 |
|
Factory rental |
15,500 |
|
|
22,500 |
|
Factory utilities |
4,500 |
|
Factory supervision |
33,700 |
|
Sales commission |
67,500 |
|
Administrative expenses |
112,500 |
|
Beginning work in process inventory |
4,000 |
|
Ending work in process inventory |
5,500 |
|
Beginning finished goods inventory |
30,000 |
|
Ending finished goods inventory |
42,500 |
Requirement:
- Prepare statement of
profit and loss - Analyse what happen if the demand of television stands drops?
- Advise Philips Sdn Bhd the best available method to assign cost for production.
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