Question

An analysis of the accounts of KAZ Manufacturing Pty Ltd reveals the following manufacturing cost data for the month ended 30 June 2019. Beginning Ending $ 14000 10000 16 000 $22 200 18000 12 000 Inventories: Raw materials Work in process Finished goods Costs incurred: Raw materials purchases Direct labour Manufacturing overhead Specific overhead costs: Indirect labour Factory insurance Machinery depreciation Machinery repairs Factory utilities Miscellaneous factory costs 128 000 100 000 60 000 31 200 8 000 8 000 3600 6200 3000 Required: Prepare the cost of goods manufactured statement for the month ended 30 June 2019. Show the presentation of the ending inventories on the 30 June 2019 Balance Sheet extract. PART B Required: 4 • Calculate the relationship between overhead and direct labour costs. • Using that relationship, calculate the labour and overhead included in the ending inventories of work in process inventory & and finished goods ending inventory.

Answer 1

CAZ Manufacturing Pvt. Ltd. Cost of Goods Manufacture Statement Month Ended 30 June 2019 10000 14000 128000 22200 119800 100000 WIP Inventory on 1 June Direct Materals: Beginning raw Material Purchses Ending Raw Material Direct Materals Used Direct Labour Manufacturing Overheads: Indirect labour Factory Insurance Machine Depreciation Machine Repair Factory Utilities Miscellaneous Factory Costs Total Manufacturing Overheads Total Manufacturing Cost Total WIP Ending WIP COST of GOODS MNUFACTURED 31200 8000 8000 36001 6200 3000 60000 279800 289800 18000 271800

CAZ Manufacturing Pvt. Ltd. Balance Shet Extract 30 June 2019 Current Asets Inventory Raw Material 22200 Work in Progres 18000 Finished Goods 12000

Relation between Factory overhead And Direct labour x 100 = Factory Overhead Direct labour 11 60000 x 100 100000 11 60%