opening stock of materials : 43300
add purchases :133000
less closing stock of materials : (52500)
--------------
material consumed : 123800
add direct labour : 168000
---------------
prime cost: 291800
add indirect materials 35000
--------------
works cost 326800
add opening wip 5100
less closing wip (9500)
-------------
manufacturing cost 322400
add : rent 24500
salaries 63000
depreciation 45500
electricity 73500
-------------
cost of production/
cost of goods available for sales 528900
add opening finished goods 12300
less closing finished goods (9200)
-----------------
cost of goods sold 532000
add sales commission 42000
--------------
cost of sales 574000
--------------
For (a) (b) (c) refer above working note.
(d) variable cost = raw material consumed + selling commission + machine electricity (since machine capacity changes with production) + direct labour
= 407300
(e) contribution = sales - variable cost
= 700000 - 407300
= 292700
(f) EBIT = sales - cost of sales
= 700000 - 574000
= 126000
A) Cost Terms and Costs Behavior- Exercise Using the following information: Inventories Materials Work in process...
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