Question

The following data are from BBC Inc. accounting records at December 31, 2018.

Sales 500,000

Raw materials inventory, beginning 8,000

Raw material ending 4,000

Purchase of raw materials (To be determined)

Direct labour 30,000

Prime cost (total) 110,000

Indirect materials 20,000

Commissions 36,000

Work in process beginning inventory 8000

Work in process ending inventory 6000

Depreciation - equipment 20,000

Depreciation - factory 22,000

Finished good inventory beginning 10,000

Finished good inventory ending (To be determined)

Maintenance expense 8,000

General office salaries 86,000

Additional Info:

1) Cost of good manufactured of last year was $10 per unit

2) Maintenance expense: 80% apply to manufacturing function

3)The sale price per unit was equal to 35$ during the year

4) Assume BBC Inc. uses FIFO

5) There were 2,500 units in the ending inventory of finished goods

Question: Prepare the schedule of COGM for year 2018. Calculate Production in units and cost of goods manufactured per unit.

Could anyone help me with this question, especially on how to calculate production?

Answer 1

Particulars	Amount($)	Amount($)	Units	Cost p.u.	Comments
Direct Material Consumed
Raw Materials Beginning	8000
Add: Purchase of raw materials	76000
Less: Raw material ending	(4000)	80000
Direct Labour		30000
Direct Expenses		0
Prime Cost		110000
Add: Factory Overheads
Indirect Materials	20000
Commissions	36000
Depreciation - equipment	20000
Depreciation - factory	22000	98000
Gross Factory Cost		208000
Add: Work in process beginning inventory	8000
Less: Work in process ending inventory	(6000)	2000
Net Factory Cost		210000
Add: Administration Overheads
Maintenance Expenses (80%)	6400
General Office Salaries	86000	92400
Cost Of Production		302400	15786	19	Round Off
Add: Finished good inventory beginning	10000		1000	10	$10000/$10 - Last year Cost Of manufacturing
Less: Finished good inventory ending	47500	(37500)	2500	19	Quantity given and Cost is taken on basis of FIFO
Cost Of Goods Sold		264900	14286	19
Add: Profit and Other Sales Overheads		235100
Sales		500000	14286	35	Round Off