Question 1

Manuel's Company

Sales 2,000,000 400,000

Slaes - 20% Gross profit 1,600,000 1,600,000
4 COST OF GOOD MANAFACTURED 1,900,000

ADD OPENDING INVENTORY OF - FINISHED GOODS. 300,000

FINISHED GOODS AVAILABLE FOR SALE 2,200,000

LESS ENDING INVENTORY OF - FINISHED GOODS (600,000)

5 COST OF GOODS SOLD 1,600,000

GROSS PROFIT 400,000

LESS
EXPENSES
 Question 2
Balkwell Company

SALES 4,000,500
SALES , RETURN & ALLOWANCES - 25,200
3,975,300

COST OF SALES / COST OF GOODS SOLD

1 DIRECT MATERIAL

OPENING INVENTORY 176,000

ADD PURCHASES 2,400,000
PURCHASES RETURNS -
FREIGHT / TRANSPORTATION 32,000
MATERIAL AVAILABLE FOR USE 2,608,000
LESS ENDING INVENTORY (196,000)
MATERIAL CONSUMED / USED 2,412,000

ADD DIREC LABOUR COST 3,204,000

2 PRIME COST 5,616,000

ADD FACTORY OVER HEAD (FOH) 1,885,600

3 MANAGACTURING COST 7,501,600

ADD OPENING INVENTORY - WIP 129,800

COST PUT INTO PROCESS 7,631,400

LESS ENDING INVENTORY - WIP (136,800)

4 COST OF GOOD MANAFACTURED 7,494,600

ADD OPENDING INVENTORY OF - FINISHED GOODS. 620,000

FINISHED GOODS AVAILABLE FOR SALE 8,114,600

LESS ENDING INVENTORY OF - FINISHED GOODS (467,400)

5 COST OF GOODS SOLD 7,647,200 7,647,200

GROSS PROFIT - 3,671,900

LESS
EXPENSES
 Question 3
Ruthven Company

SALES 72,000

COST OF SALES / COST OF GOODS SOLD

1 DIRECT MATERIAL DIRECT LABOUR

FACTORY OVERHEADS 2/3 OF DIR
OPENING INVENTORY 8,000
ADD PURCHASES 36,000
PURCHASES RETURNS -
FREIGHT / TRANSPORTATION -
MATERIAL AVAILABLE FOR USE 44,000
LESS ENDING INVENTORY 8,500
MATERIAL CONSUMED / USED 52,500

ADD DIREC LABOUR COST 15,000

2 PRIME COST 67,500

ADD FACTORY OVER HEAD (FOH) 10,000

3 MANAGACTURING COST 77,500

ADD OPENING INVENTORY - WIP 8,000

COST PUT INTO PROCESS 85,500

LESS ENDING INVENTORY - WIP (15,000)

4 COST OF GOOD MANAFACTURED 70,500

ADD OPENDING INVENTORY OF - FINISHED GOODS. 7,000

FINISHED GOODS AVAILABLE FOR SALE 77,500

LESS ENDING INVENTORY OF - FINISHED GOODS (10,200)

5 COST OF GOODS SOLD 67,300 67,300

GROSS PROFIT 4,700

LESS
EXPENSES
ECT LABOUR 15,000
TORY OVERHEADS 2/3 OF DIRECT LABOUR 10,000
 Question 4
Crowley, inc

SALES 182,000
182,000

COST OF SALES / COST OF GOODS SOLD

1 DIRECT MATERIAL DIRECT LABOUR

FACTORY OVERHEADS AT THE RA
OPENING INVENTORY 7,000
ADD PURCHASES -
PURCHASES RETURNS -
FREIGHT / TRANSPORTATION -
MATERIAL AVAILABLE FOR USE 7,000
LESS ENDING INVENTORY (7,400)
MATERIAL CONSUMED / USED 41,900

ADD DIREC LABOUR COST 30,000

2 PRIME COST 71,900

ADD FACTORY OVER HEAD (FOH) 45,000

3 MANAGACTURING COST 116,900

ADD OPENING INVENTORY - WIP 9,600

COST PUT INTO PROCESS 126,500

LESS ENDING INVENTORY - WIP (13,000)

4 COST OF GOOD MANAFACTURED 113,500

ADD OPENDING INVENTORY OF - FINISHED GOODS. 15,000

FINISHED GOODS AVAILABLE FOR SALE 128,500

LESS ENDING INVENTORY OF - FINISHED GOODS (17,500)

5 COST OF GOODS SOLD 111,000 111,000

GROSS PROFIT 71,000

LESS
EXPENSES
MARKETING EXPENSES 14,100 37,000
GENERAL & ADMINISTRATIVE EXPENSES 22,900 34,000
ECT LABOUR 30,000
TORY OVERHEADS AT THE RATE OF 150% OF DIRECT LABOUR COST 45,000
 Question 5
Shelikoff Company

SALES 314,000
314,000

COST OF SALES / COST OF GOODS SOLD

1 DIRECT MATERIAL DIRECT LABOUR

FACTORY OVERHEADS :50% OF D
OPENING INVENTORY 3,800
ADD PURCHASES 140,000
PURCHASES RETURNS -
FREIGHT / TRANSPORTATION -
MATERIAL AVAILABLE FOR USE 143,800
LESS ENDING INVENTORY (4,300)
MATERIAL CONSUMED / USED 139,500

ADD DIREC LABOUR COST 67,350

2 PRIME COST 206,850

ADD FACTORY OVER HEAD (FOH) 33,675

3 MANAGACTURING COST 240,525

ADD OPENING INVENTORY - WIP 4,600

COST PUT INTO PROCESS 245,125

LESS ENDING INVENTORY - WIP (6,200)

4 COST OF GOOD MANAFACTURED 238,925

ADD OPENDING INVENTORY OF - FINISHED GOODS. 5,900

FINISHED GOODS AVAILABLE FOR SALE 244,825

LESS ENDING INVENTORY OF - FINISHED GOODS (9,270)

5 COST OF GOODS SOLD 235,555 235,555

GROSS PROFIT 78,445

LESS
EXPENSES
ECT LABOUR 67,350
TORY OVERHEADS :50% OF DIRECT LABOUR COST 33,675
 Question 6
Metaxen Corporation

SALES 1,844,000
SALES DISCOUNT - 8,000
1,836,000

COST OF SALES / COST OF GOODS SOLD

1 DIRECT MATERIAL
FACTORY OVERHEADS (EXCLUDIN
OPENING INVENTORY 88,000 DEPRECIATION
ADD PURCHASES 366,000
PURCHASES RETURNS -
FREIGHT / TRANSPORTATION 6,600
MATERIAL AVAILABLE FOR USE 460,600
LESS ENDING INVENTORY (64,000)
MATERIAL CONSUMED / USED 396,600

ADD DIREC LABOUR COST 523,600

2 PRIME COST 920,200

ADD FACTORY OVER HEAD (FOH) 572,800

3 MANAGACTURING COST 1,493,000

ADD OPENING INVENTORY - WIP 29,800

COST PUT INTO PROCESS 1,522,800

LESS ENDING INVENTORY - WIP (38,800)

4 COST OF GOOD MANAFACTURED 1,484,000

ADD OPENDING INVENTORY OF - FINISHED GOODS. 44,200

FINISHED GOODS AVAILABLE FOR SALE 1,528,200

LESS ENDING INVENTORY OF - FINISHED GOODS (66,000)

5 COST OF GOODS SOLD 1,462,200 1,462,200

GROSS PROFIT 373,800

LESS
EXPENSES
TORY OVERHEADS (EXCLUDING DEPRECIATION) 468,400
104,400
572,800
 Question 7
Brockway Corporation

COST OF SALES / COST OF GOODS SOLD

1 DIRECT MATERIAL

OPENING INVENTORY 90,000

ADD PURCHASES 198,000
PURCHASES RETURNS -
FREIGHT / TRANSPORTATION -
MATERIAL AVAILABLE FOR USE 288,000
LESS ENDING INVENTORY (95,000)
MATERIAL CONSUMED / USED 193,000

ADD DIREC LABOUR COST 224,000

2 PRIME COST 417,000

ADD FACTORY OVER HEAD (FOH) 167,000

3 MANAGACTURING COST 584,000

ADD OPENING INVENTORY - WIP 70,000

COST PUT INTO PROCESS 654,000

LESS ENDING INVENTORY - WIP (80,000)

4 COST OF GOOD MANAFACTURED 574,000

ADD OPENDING INVENTORY OF - FINISHED GOODS. 110,000

FINISHED GOODS AVAILABLE FOR SALE 684,000

LESS ENDING INVENTORY OF - FINISHED GOODS (95,000)

5 COST OF GOODS SOLD 589,000 589,000

GROSS PROFIT - 589,000

LESS
EXPENSES
 Question 8
Reinecke.Inc

COST OF SALES / COST OF GOODS SOLD

1 DIRECT MATERIAL

OPENING INVENTORY -
ADD PURCHASES -
PURCHASES RETURNS -
FREIGHT / TRANSPORTATION -
MATERIAL AVAILABLE FOR USE -
LESS ENDING INVENTORY -
MATERIAL CONSUMED / USED 440,000

ADD DIREC LABOUR COST 290,000

2 PRIME COST 730,000

ADD FACTORY OVER HEAD (FOH) 29,000

3 MANAGACTURING COST 759,000

ADD OPENING INVENTORY - WIP 41,200

COST PUT INTO PROCESS 800,200

LESS ENDING INVENTORY - WIP (42,500)

4 COST OF GOOD MANAFACTURED 757,700

ADD OPENDING INVENTORY OF - FINISHED GOODS. 34,300

FINISHED GOODS AVAILABLE FOR SALE 792,000

LESS ENDING INVENTORY OF - FINISHED GOODS (31,500)

5 COST OF GOODS SOLD 760,500 760,500

DURING THE YEAR UNITS COMPLETED 18,000

UNIT COST OF GOOD MANUFACTURED 42
GROSS PROFIT - 760,500
LESS
EXPENSES
 Question 9
White Corporation

SALES 853,600

COST OF SALES / COST OF GOODS SOLD

1 DIRECT MATERIAL
PURCHESES DISCOUNT
OPENING INVENTORY 34,200
ADD PURCHASES 358,800
PURCHASES RETURNS -
FREIGHT / TRANSPORTATION 8,600
MATERIAL AVAILABLE FOR USE 401,600
LESS ENDING INVENTORY (49,300)
MATERIAL CONSUMED / USED 352,300

ADD DIREC LABOUR COST 162,500

2 PRIME COST 514,800

ADD FACTORY OVER HEAD (FOH) 47,900

3 MANAGACTURING COST 562,700

ADD OPENING INVENTORY - WIP 81,500

COST PUT INTO PROCESS 644,200

LESS ENDING INVENTORY - WIP (42,350)

4 COST OF GOOD MANAFACTURED 601,850

ADD OPENDING INVENTORY OF - FINISHED GOODS. 48,600

FINISHED GOODS AVAILABLE FOR SALE 650,450

LESS ENDING INVENTORY OF - FINISHED GOODS (68,040)

5 COST OF GOODS SOLD 582,410 582,410

GROSS PROFIT 271,190

LESS
EXPENSES
CHESES DISCOUNT 5,200

FINISHED GOOD JANUARY 1 AMOUNT 48,600

FINISHED GOOD JANUARY 1 UNITS 300
PER UNIT COST 162
FINISED GOOD INVENTORY AMOUNT DECEMBER 31 68,040
FINISED GOOD INVENTORY UNITS DECEMBER 31 420

162
68040
 Question 10
RATE OF RETURN ON CAPITAL EMPLOYED

NET INCOME 40,000

SALES 200,000
TOTAL CAPITAL EMPLOYED 400,000

RATE OF RETURN ON CAPITAL EMPLOYED 10%

 Question 11

SALES 12,000,000
LESS COST OF SALES / COGS 60% (7,200,000)

GP 40% OF SALES 4,800,000

EXPENSES

MKT EXP 15% OF SALES 1,800,000

OPERATING EXP 1,762,500
FINANCIAL EXP/INTER 5% 37.5% OF 2000,000 750000 37,500

TOTAL EXP 3,600,000

EBT 1,200,000

TAX 10% OF SALES -

EBT 1,200,000

SALES X

PRETAX INCOME 10% * X 1200000

12,000,000
1,837,500

2,962,500

562,500
 Question 12
Yukon Refrigerator Company

2) SALES SOLD 12,400

ADD ENDING INVENTORY 200 AT THE RATE OF RS 395/EACH
AVAIABLE 12,600 79,000
LESS OPENING INV 100

MANAFACURED 12,500 4,937,500

3) SALES 6,634,000

COST OF SALES / COST OF GOODS SOLD

1 DIRECT MATERIAL

OPENING INVENTORY 268,000

ADD PURCHASES 1,946,700
PURCHASES RETURNS -
FREIGHT / TRANSPORTATION -
MATERIAL AVAILABLE FOR USE 2,214,700
LESS ENDING INVENTORY (167,000)
MATERIAL CONSUMED / USED 2,047,700

ADD DIREC LABOUR COST 2,125,800

2 PRIME COST 4,173,500

ADD FACTORY OVER HEAD (FOH) 764,000

3 MANAGACTURING COST 12500 UNITS 4,937,500

ADD OPENING INVENTORY - WIP -

COST PUT INTO PROCESS 4,937,500

LESS ENDING INVENTORY - WIP -

4 COST OF GOOD MANAFACTURED 4,937,500

ADD OPENDING INVENTORY OF - FINISHED GOODS. 43,000

FINISHED GOODS AVAILABLE FOR SALE 4,980,500

LESS ENDING INVENTORY OF - FINISHED GOODS (79,000)

5 COST OF GOODS SOLD 4,901,500 (4,901,500)

GROSS PROFIT 1,732,500

LESS
EXPENSES
MARKETING EXP 516,000
GENERAL AND ADMIN 461,000
(977,000)
EBIT/ INCOME / PROFIT 755,500
395 UNIT COST 3
140 GP PER UNI 4

26% RATIO OF GP TO SALE 6

61 INCOME PER UNIT 5

11% INCOME TO SALES %