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MGT 404

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Aisha Kanwal
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4 views2 pages

MGT 404

This is Mgt404 First Assignment solution file.

Uploaded by

Aisha Kanwal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Name: Aisha Kanwal

Student ID: bc230201788


Assignment: MGT404
Case:
The following information has been taken from the accounting records of Zee Limited
for the Year 20X3:

Direct Labor cost 350,256


Manufacturing overhead 601,705
Administrative Expenses 125,248
Selling expenses 150,895
Purchases of raw materials 875,072
Sales 3,550,755
FOF applied on basis of direct labour 50%
Income tax rate 30%
Inventories Jan-01 Dec-31
Rs. Rs.
Raw material 98,425 67,875
Work in process 160,452 102,327
Finished goods 260,256 217,915
Note: Over-under applied FOD may be closed to the entire production.
Using the above information, prepare the following schedule items for the year 20X3:
a) Cost of goods manufactured:
Solution:
Description Amount (Rs.)
Opening Raw Material Inventory 98,425
Add: Purchases of Raw Materials 875,072
Material Available for Use 973,497
Less: Ending Raw Material Inventory (67,875)
Direct Material 905,622
Direct Labor 350,256
Prime cost 1,255,878
Applied Factory Overhead (50% of Direct 175,128
Labor)
Total Manufacturing Costs 1,431,006
Add: Opening Work in Process Inventory 160,452
Cost of Goods Available for sale 1,591,458
Less: Ending Work in Process Inventory (102,327)
Cost of Goods Manufactured (COGM) 1,489,131

b) Cost of goods sold (actual):


Description Amount (Rs.)
Cost of Goods Manufactured 1,489,131
Add: Opening Finished Goods Inventory 260,256
Cost of Goods Available for sale 1,749,387
Less: Ending Finished Goods Inventory (217,915)
Cost of Goods Sold (COGS) (Normal) 1,531,472
Add: Actual FOH 601,705
Less: Applied FOH (175,128)
Add: Under Applied 426,577
Cost of Goods Sold (Actual) 1,958,049

c) Income statement to determine net profit after tax:


Description Amount (Rs.)
Sales 3,550,755
Less: Cost of Goods Sold 1,958,049
Gross Profit 1,592,706
Operating Expenses:
Administrative Expenses 125,248
Selling Expenses 150,895
Less: Total Operating Expenses (276,143)
Profit before Tax (PBT) 1,316,563
Less: Income Tax (30%) (394,969)
Net Profit 921,594

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