costing

Home Comforts is dealing in the manufacturing of wood products since last two decade
in more than 5 cities of Pakistan. The company uses First in First out (FIFO) method for
costing its raw materials. On 1st January 2015, the stocks of raw material, work in process
and finished goods were Rs. 20,000, Rs. 8,000 and Rs. 3,000 respectively. During the
year, material was purchased on 10th January and 15th July at Rs. 100,000 and Rs. 60,000
respectively with total freight inward of Rs. 1,000. Direct Labor cost was Rs. 50,000 and
marketing manager salary was of Rs. 70,000 while conversion cost was recorded as Rs.
80,000.
At the year end, no inventories were found in hand except work in process which was
twice of the balance as on 31st December 2014.
Raw material b/d
Purchases
Freight inward

12000
23000
1000
172000

Total material consumed

Direct Labour
Factory Overhead
Total Factory Cost
WIP b/d
WIP c/d
Costs of goods manufactured
Finished goods b/d
Finished goods c/d
Cost of goods sold

181000
50000
30000
261000
8000
(16000)
253000
8000
0
261000