The Ashar Corporation produces a household appliance that sells for Rs.90. The basic patent is held by the PCSIR, who is paid a royalty of Rs.5 on each unit sold. The royalty is considered as marketing expense. The data taken from books and other records of the company on December 31, 2010, are shown below Invertories: January 1 December 31 Finished goods Rs 4,584 Rs 7,518 Work in process Rs 8,159 Rs 4,002 Material Rs 3,420 Rs 7,130 Sales Rs 387,000 Material purchased 90,563 Freight in 477 Direct labour 62,522 Indirect labour 5,026 Depreciation -factory equipment 2,135 Miscellaneous factory overhead 7,908 Rent 5,000 Sales salaries 28,000 Royalties paid 21,500 Freight out 1,860 Miscellaneous marketing expenses 11,380 Office salaries 24,790 Uncollectible account expenses 280 Miscellaneous administrative expenses 8,700 Interest earned (Cr) 130 Purchase discount 840 Gain on sale of fixed assets 100 There were 120 units were in the inventory of finished goods on January 1 and 179 in the inventory on December 31. All units held on January 1 were sold during the year. Rent is to be apportioned 80% to manufacturing, 10% to marketing, and 10% to administration. Required: An income statement for year ended December 31, 2010, supported by a schedule of cost of goods sold statement. The number of units manufactured. Determine the cost of each unit manufactured during the year.
The Ashar Corporation produces a household appliance that sells for Rs.90. The basic patent is held by
the PCSIR, who is paid a royalty of Rs.5 on each unit sold. The royalty is considered as marketing
expense. The data taken from books and other records of the company on December 31, 2010, are
shown below
Invertories: January 1 December 31
Finished goods Rs 4,584 Rs 7,518
Work in process Rs 8,159 Rs 4,002
Material Rs 3,420 Rs 7,130
Sales Rs 387,000
Material purchased 90,563
Freight in 477
Direct labour 62,522
Indirect labour 5,026
Miscellaneous factory overhead 7,908
Rent 5,000
Sales salaries 28,000
Royalties paid 21,500
Freight out 1,860
Miscellaneous marketing expenses 11,380
Office salaries 24,790
Uncollectible account expenses 280
Miscellaneous administrative expenses 8,700
Interest earned (Cr) 130
Purchase discount 840
Gain on sale of fixed assets 100
There were 120 units were in the inventory of finished goods on January 1 and 179 in the inventory on December 31. All units held on January 1 were sold during the year. Rent is to be apportioned 80% to manufacturing, 10% to marketing, and 10% to administration.
Required:
- An income statement for year ended December 31, 2010, supported by a schedule of cost of goods sold statement.
- The number of units manufactured.
- Determine the cost of each unit manufactured during the year.
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