Step 1

calculate Prime cost

DM (Materials Purchased + Freight - Returns) + add op. stock - Closing stock

320000
16000
4800
new cost of materials added
140000
180000
291200

DL actual + accrued

160000
8000
168000

DE actual

50000

50000

PC DM+DL+DE

509200

add Factory OH

IL actual + accrued 19200

Super 10000
R&U 14000
HLP (8/10)*65000 52000
R&T (2/3)*6300 4200
ME 18700
DEP: plant (0.10*460500) 46050
Build(0.04*200000*8/10)
6400
Factory OH 170550

Work Cost gross (PC+FOH)

679750
do adj for inventory
(add:opening WIP ; less: Closing WIP)
8000
Work Cost Net 687750

Cost of Production 687750

do adj for FG inventory

add opening 80000

COG AFS 767750
less closing 115000
COGS 652750
Add non-manufacturing
administration OH
HLP(1/10*65000) 6500
R&T(1/3*6300) 2100
OS&E 8600
Dep Build(0.04*200000)*1/10
800
OA(0.05*17500) 875
Total 18875

S&D oh
HLP(1/10*65000) 6500
SC 33600
ST 11000
SP 22500
DS&E 18000
Dep: Build(0.04*200000)*1/10
800
Total 92400

Total Non- manuf OH 111275

Cost of sales 764025

Sales 768000
less returns 14000
net sales 754000
less cost of sales 764025
profit/loss -10025
PC 2940000 DM 1st Jan 160000
DL 1800000 DM purchased 1600000
DM AFU 1760000
DM used 1140000
DM Used 1140000
CC DL+IND Fac Cost
DM closing 620000
1800000+(0.4*CC)
0.6 Cc + 0.4 CC DM used 1140000
DL Used 1800000
so, DL = 1800000 = 0.6 CC PC 2940000
CC 3000000 IND MOF 1200000
IND FC 1200000
WC gross 4140000

add WIP 1st Jan 340000 STOP here

WIP AFU 4480000

less closing WIP 280000

Cost of Prodiuction 4200000

add Opening FG 1st jan 300000
COG AFS 4500000

less closing FG 500000

COGS 4000000 stage 3
Revenue 5000000 stage 2
margin 20%
COGS 4000000
1500 : 1100 : 900 : 500 common factors -- 00
15 : 11 : 9 : 5 total = 15+11+9 +5 40
(15/40)*10000 3750 similarly, others and check total =10000

240000 : 180000 : 120000 : 60000 common factors -- 0000 strike it off

24: 18: 12: 6 then, common factor -- 6
4: 3: 2:1 total =10
(4/10)*6000 2400
this time there is no item. But service stores
and you follow the same direct method of distribution