Reference no: EM132548660
Problem 1: The following data were taken from the cost records of AQ manufacturer of the year 2001:
Finished goods inventory (opening) 120,000
Work in process (opening) 10,000
Freight in 5,000
Factory overhead (80% of direct labour) 120,000
Raw material inventory (opening) 10,000
Purchase of raw materials ?
Material returned to supplier 3,000
Work in process (ending) 80,000
Gross profit (20% of sales) 60,000
Cost of goods manufactured 300,000
Raw material inventory (ending) 12,000
REQUIRED:
i) Prepare statement of cost of goods manufactured and cost of goods sold.
ii) Compute sales revenue.
Problem 2: Raza Corporation produces special products to customer's specifications and uses job order cost system. The following transactions relates to its operations for the month of December 2003:
a. Purchase of raw material on account Rs. 50,000.
b. Material issued to production Rs. 66,000 out of which Rs. 6,000 was used indirectly.
c. Labor used direct Rs. 100,000 indirect Rs. 10,000.
d. Factory overhead cost incurred Rs. 80,000.
e. Factory overhead applied 100% of direct labor cost.
f. Jobs were completed to the extent of 95%.
g. Goods sold on account Rs.172,500.
h. Finished goods inventory valued at Rs.15,000.
REQUIRED: Pass necessary journal entries and close the factory overhead account.