question archive Kamran Company produces various types of fertilizer
Kamran Company produces various types of fertilizer
Subject:AccountingPrice:2.84 Bought3
Kamran Company produces various types of fertilizer. No beginning units in process or finished units were on hand on January 1, 2015, 30,000 finished units were on hand on December 31, 2015 and 95,000 units were sold during the year. There were no units in work in process inventory on December 31, 2015. The material put into production cost Rs. 300,000. 75% were direct material. There was no beginning or ending material inventory. Labor costs were Rs. 350,000, 40% was for indirect labor. Factory overhead costs, other than indirect materials and indirect labors were the following: Heat, light and power Rs. 115,000 Depreciation 78,000 Factory Taxes 65,000 Repairs and Maintenance 42,000 Selling Expenses were Rs. 80,000 general and administrative expenses were Rs. 50,000. Calculate Cost of Goods Manufactured.
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Answer: $950,000
.
| Calculation of cost of Goods Manufactured | ||
| Cost of direct materials used [Total material cost x 75% = $300,000 x 75%] | $225,000 | |
| Direct labor [Total labor cost x (100% - 40%) = $350,000 x 60%] | $210,000 | |
| Manufacturing Overhead / Factory Overhead: | ||
| Indirect material [Total material cost x (100% - 75%) = $300,000 x 25%] | $75,000 | |
| Indirect labor [Total labor cost x 40% = $350,000 x 40%] | $140,000 | |
| Heat, light and power | $115,000 | |
| Depreciation | $78,000 | |
| Factory Taxes | $65,000 | |
| Repairs and Maintenance | $42,000 | |
| Total manufacturing overhead / factory overhead [$75,000 + $140,000 + $115,000 + $78,000 + $65,000 + $42,000] | $515,000 | |
| Total manufacturing cost [$225,000 + $210,000 + $515,000] | $950,000 | |
| Add: Beginning Work in process inventory | $0 | |
| Total cost of work in process inventory [$950,000 + $0] | $950,000 | |
| Less: Ending work in pricess inventory | $0 | |
| Cost of Goods Manufactured [$950,000 - $0] |
