Problem Set 2 (Problem No- 3)

Indirect other manufacturing costs are not inventoriable cost and there are 9000 units of FG inve
Rs.
DM (V) #REF!
DL (V) #REF!
Plant Energy Cost (V) #REF!
Indirect Labour (V) #REF!
Indirect Labour (F) #REF!
Marketing, Distribution & Customer OH (V) #REF!
Marketing, Distribution & Customer OH (F) #REF!
Admin OH (F) #REF!
Note: Variable manufacturing costs are with respect to units produced; variables Marketing, Distribution & Cust
to units sold

Solution

i.Total Value of Ending Finished Goods Inventory

A Direct Material #REF! Rs.

B Direct Labour #REF! Rs.
Manufacturing Overhead
Variable
a. Plant Energy Cost (V) #REF! Rs.
b. Indirect Labour (V) #REF! Rs.
C Total Variable Manufacturing OH (a+b) #REF! Rs.
Fixed
d. Indirect Labour (F) #REF! Rs.
D Total Fixed Manufacturing OH (d) #REF! Rs.

E Cost of goods Manufactured (A+B+C+D) #REF! Rs.

F Production in units #REF! Units
G Cost of goods manufactured per unit (E/F) #REF! Rs.
H FG Inventory =9000 (given) 9,000 Units
Total value of ending goods inventory #REF! Rs.

ii.Operating Income

Selling Price per unit Calculation

No. of units sold= Opening Inventory + Units Produced-Closing Inventory
A Beginning inventory (FG) 0 Units
B Units Produced #REF! Units
C Ending inventory (FG) 9000 Units
D No. of units Sold = A+B-C #REF! Units
E Revenue (given) #REF! Rs.
F Selling Price per unit = E/D #REF! Rs.

Operating Income Calculation

Operating Income= Gross Margin- Operating Cost
Gross Margin= Revenue- COGS
A Revenue for 91,000 @4.8 #REF! Rs.
B Cost of Goods Sold
I. Cost of good manufactured #REF! Rs.
II. Beginning inventory (FG) 0 Rs.
III. Ending inventory (FG) #REF! Rs.
Cost of Goods Sold (I+II-III) #REF! Rs.
C Gross Margin (Revenue- COGS) #REF! Rs.
D Operating Costs
i. Marketing, Distribution & Customer OH (V) #REF! Rs.
ii. Marketing, Distribution & Customer OH (F) #REF! Rs.
iii. Admin OH (F) #REF! Rs.
D Total Operating cost (i+ii+iii) #REF! Rs.
E Operating Income (C-D) #REF! Rs.
em No- 3)
st and there are 9000 units of FG inventory on Dec 31
Inventory data: begin Jan 01 and ending Dec 31
Direct Material (DM) 0 2000 kg
WIP 0 0 Units
FG 0 9000 Units
FG 0 ? Rs.

ariables Marketing, Distribution & Customer Service costs are wrt