CIA1003 TUTORIAL PT 2

Q:
Children's Star books sells summer study packs for RM140 each. The cost of assembling
these packages at the factory is as follows: Building rent: RM12,000 Bench and stool rent:
RM10,000 Building heating, cooling and lighting: RM24,000 Package instruction: RM300
package job order: RM20,000 package envelope: RM100 Assembly packers salary:
RM192,000 overseer The company produces 10,000 packages and sells 8,500 of them.
Calculate manufacturing costs that will be added to inventory.

A:
Now first of all, the cost per unit of product by dividing the cost of manufacturing by the
number of units produced. Manufacturing costs include direct materials, direct labor, variable
overhead and fixed overhead.

12,000+ 10,000+24,000+300+20,000+100+192,000+ 48,000+36,000

=34.24
10,000

Then, the cost of the unsold units is added to inventory. The company produced 10,000 units
and sold 8,500, so 1,500 remain unsold.

1,500 x 34,24 + 51,360