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PROBLEM 4. The particulars relating to 1,200 kgs. of a certain raw material purchased by a company during June were as follows : (a) Lot prices quoted by supplier and accepted by the company for placing the purchase order : Lot upto 1,000 kgs. @ 22 per kg. Between 1,000-1,500 kgs. @$ 20 per kg. Between 1,500-2,000 kgs. @ $ 18 per kg. F.O.R. Supplier's Factory (b) Trade discount 20%. (c) Additional charge for containers @ $ 10 per drum of 25 kgs. (d) Credit allowed on return of containers @ $ 8 per drum. (e) Sales tax at 10% on raw material and 5% ön drums. () Total freight paid by the purchaser $ 240. (g) Insurance at 2.5% (on net invoice value) paid by the purchaser. (h) Stores overhead applied at 5% on total purchase cost of material. The entire quantity was received and issued to production. The containers are returned in due course. Draw up a suitable statement to show: (a) Total cost of material purchased ; and (b) Unit cost of material issued to production.

PROBLEM 4. The particulars relating to 1,200 kgs. of a certain raw material purchased by a company during June were as follows : (a) Lot prices quoted by supplier and accepted by the company for placing the purchase order : Lot upto 1,000 kgs. @ 22 per kg. Between 1,000-1,500 kgs. @$ 20 per kg. Between 1,500-2,000 kgs. @ $ 18 per kg. F.O.R. Supplier's Factory (b) Trade discount 20%. (c) Additional charge for containers @ $ 10 per drum of 25 kgs. (d) Credit allowed on return of containers @ $ 8 per drum. (e) Sales tax at 10% on raw material and 5% ön drums. () Total freight paid by the purchaser $ 240. (g) Insurance at 2.5% (on net invoice value) paid by the purchaser. (h) Stores overhead applied at 5% on total purchase cost of material. The entire quantity was received and issued to production. The containers are returned in due course. Draw up a suitable statement to show: (a) Total cost of material purchased ; and (b) Unit cost of material issued to production.

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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PROBLEM 4. The particulars relating to 1,200 kgs. of a certain raw material purchased by a company during June were as follows : (a) Lot prices quoted by supplier and accepted by the company for placing the purchase order : Lot upto 1,000 kgs. @ 22 per kg. Between 1,000-1,500 kgs. @$ 20 per kg. Between 1,500-2,000 kgs. @ $ 18 per kg. F.O.R. Supplier's Factory (b) Trade discount 20%. (c) Additional charge for containers @ $ 10 per drum of 25 kgs. (d) Credit allowed on return of containers @ $8 per drum. (e) Sales tax at 10% on raw material and 5% ön drums. () Total freight paid by the purchaser $ 240. (g) Insurance at 2.5% (on net invoice value) paid by the purchaser. (h) Stores overhead applied at 5% on total purchase cost of material. The entire quantity was received and issued to production. The containers are returned in due course. Draw up a suitable statement to show: (a) Total cost of material purchased ; and (b) Unit cost of material issued to production.
Transcribed Image Text:PROBLEM 4. The particulars relating to 1,200 kgs. of a certain raw material purchased by a company during June were as follows : (a) Lot prices quoted by supplier and accepted by the company for placing the purchase order : Lot upto 1,000 kgs. @ 22 per kg. Between 1,000-1,500 kgs. @$ 20 per kg. Between 1,500-2,000 kgs. @ $ 18 per kg. F.O.R. Supplier's Factory (b) Trade discount 20%. (c) Additional charge for containers @ $ 10 per drum of 25 kgs. (d) Credit allowed on return of containers @ $8 per drum. (e) Sales tax at 10% on raw material and 5% ön drums. () Total freight paid by the purchaser $ 240. (g) Insurance at 2.5% (on net invoice value) paid by the purchaser. (h) Stores overhead applied at 5% on total purchase cost of material. The entire quantity was received and issued to production. The containers are returned in due course. Draw up a suitable statement to show: (a) Total cost of material purchased ; and (b) Unit cost of material issued to production.
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