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Joytoy manufacturers had a policy of transferring factory production to the sales department at a profit of 10% on total cost

Raw materials costing 10 000 Sold Direct wages paid Electricity paid Insurance factory Repairs to equipment (factory) Returns

Postage and telephone 1 800 Accumulated depreciation: Office furniture 5 600 Equipment 24 000 Motor vehicles 15 000 Other exp

manufactured goods are delivered the sales department by the factory. 2. Depreciation to be provided: Factory equipment at 10

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Answer #1

Production cost statement for JOYTOY Manufacturers

for the year ended 31 st Dec. 2000

Direct material used:

opening raw materrial 20000

purchases (245000-5000) 240000

Less:closing raw mateiral (30000)

sales of raw material (at cost) (10000)

220000

Direct labour: 90000

Add:opening prepaid     200

closing outstanding 960

Less:opening ooutstanding 400

90760
Direct overheads:
carriage inwards 3000
electricity 4200
insurance 1200
repairs 2740
rates 4800
water (75%) 3150
stationery 5100
maintenance 12000
Depreciation (10% * 60000-24000) 3600
total factory cost 350550
Add:Opening work in progress 30000
Less:Closing work in progress 24000
total production cost 356550
Add:10% inter process profit 35655
value at which work in progress transferred to finished stock 392205
Add: opening finished stock 55000
Proit on sale (50% of sales) 396000
Less: sales 792000
Closing finished stock 51205

INCOME STATEMENT

To custome duty 4000 By Profit on sale of finished stock 396000
To water expenses (25%) 1050 By interr process profit 35655
Postage 1800 By profit on sale of raw materrial 8000
Depreciation:furniture (14000-5600)*5% 420
motor vehicle:(50000-15000)*20% 7000
Provision for unrealised profit 5500
To Sundry expenses 235240
To Profit 184645
439655 439655

  

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