Question

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Chaos Manufacturing had the following financial information for the year ended December 31 2019: Inventory Balances: Beginning Ending Work in Progress $ 90,000 $ 60,000 Finished Goods $57,000 $ 67,000 Raw Materials $ 10,000 $ 20,000 During the year, the budgeted and actual costs were as follows: | Note Budget Actual Raw Materials 1 200,000 See note 1 Labour 2 440,000 418,000 Depreciation Factory Equipment 72,000 72,000 Depreciation Office Equipment 24,000 23,000 Building Rent 3 100,000 100,000 Maintenance - Factory Equipment 64,000 40,000 Utilities - Electrical 4 200,000 180,000 Sales Commissions 40,000 46,000 Advertising 25,000 20,000 Shipping 5 20,000 17,000 Sales for the year were $1,500,000 Note 1 - Raw material Budget: 90% of raw materials are traced directly to specific jobs, and the remaining 10% of raw materials are related to production but are untraceable to specific jobs Actual: during the year $20,000 worth of materials were untraceable, and the rest were directly traced and applied to WIP. During the year $200,000 of raw materials were purchased

Answer 1

Particulars	Budgeted	Actual	Under-)/Over6+) Ohs Absorp.
Sales[a]	1500000	1500000
Direct Materials *1	180000	190000
Direct Labour	200000	170000
Maufacturing Overheads
Indirect Materials	20000	20000
Indirect Labours	80000	85000	-5000
Bulding Rent	100000	100000
Deprecia tion Factory Equipments	72000	72000
Maintenance Factory Equipments	64000	40000	24000
Utitilities[90%]	180000	162000
Shipping[20% for budgeted]	4000	0
Total Manufacturig Cost[b]	900000	839000
Contribution Margin	600000	661000
Admin & Selling Overheads
Depreciatio Office Equipmets	24000	23000	1000
Utilities[10%]	20000	18000
Shipping	16000	17000	-1000
Sales Commi ssion	40000	46000	-6000
Advert ising	25000	20000	5000
Sales & Marketin g Salaries	160000	163000	-3000
Total Admin & Sellig Costs[c]	285000	287000
Total Cost Of Goods Sold[b+c]	1185000	1126000
Net Margin	315000	374000

Working Notes :-

1]Raw Material cosued

Particulars	Budgeted $	Actual $
RM purchased	200000	200000
Decrease in WIP[90000-60000]		30000
Increase in FG Stock[57000-67000]		-10000
Increase in RM[10000-20000]		-10000
Net RM Consumed	200000	210000
Less Indirect Materials	20000	20000
Direct Material Cost	180000	190000