QUESTION THREE ERS Itd is a company engaged in the manufacture of sports shoes. The last financial year to 31 January has seen the company produce its lowest profit for five years. The summary profit and loss account for the year to 31* January is set out below к K Sales revenue (50,000 shoes @ K70) 3,500,000 Cost of sales Direct materials 1,400,000 Direct labour 1,150,000 Variable manufacturing overheads 200,000 Fixed manufacturing overheads 410.000 Total manufacturing costs 3.160.000 Gross profit 340,000 Selling and distribution overheads (Fixed) 134,000

QUESTION THREE ERS Itd is a company engaged in the manufacture of sports shoes. The last financial year to 31 January has seen the company produce its lowest profit for five years. The summary profit and loss account for the year to 31* January is set out below к K Sales revenue (50,000 shoes @ K70) 3,500,000 Cost of sales Direct materials 1,400,000 Direct labour 1,150,000 Variable manufacturing overheads 200,000 Fixed manufacturing overheads 410.000 Total manufacturing costs 3.160.000 Gross profit 340,000 Selling and distribution overheads (Fixed) 134,000

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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COST OF GOODS MANUFACTURED AND SOLD STATEMENT AND NET INCOME OR LOSS PROBLEM 2-3 The Parrish Fertilizer Company produces various types of fertilizer. No beginning units in process or finished units were on hand on January 1, 19X3; 30,000 finished units were on hand on December 31, 19X3, and 95,000 units were sold during the year. There were no units in work-in-process inventory on December 31, 19X3. The materials put into produç- tion cost $300,000; 75% were direct materials. There was no beginning or ending materials inventory. Labor costs were $350,000; 40% was for indirect labor. Factory overhead costs, other than indirect materials and indirect labor, were the following: Heat, light and power Depreciation.... Property taxes Repairs and maintenance.. $115,000 78,000 65,000 42,000 .... ...... .... Selling expenses were $80,000; general and administrative expenses were $50,000. Requlred: Compute the following: a Cost of goods manufactured b Total cost c Unit cost d Prime costs e…
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Question 3 A Lighting industry manufactures and sells a single product, heavy-duty battery operated standby lamp. The financial controller has prepared the following income statement for the most recent year: An Industry Income Statement under Absorption costing, for the year ended December 31. Sales Revenue RM2,450,000 Less: Cost of Goods Sold RM1,140,000 Gross Profit RM1,310,000 Less: Operating Expenses RM 750,000 Operating Income RM 560,000 The company produced 40,000 units and sold 30,000 units during the ear ending Dec 31. Fixed manufacturing overhead (MOH) for the year was RM320,000, while fixed operating expenses were RM450,000. Assume per unit cost of Direct Material and direct labor is RM15 and RM12 respectively. The company had no beginning inventory. Requirements Will the company’s operating income under variable costing be higher, lower or the same as operating income under absorption costing? Why? Project the company’s operating income…
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During the year, Sokowski manufacturing earned income of 350,000,000 from total sales
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