Nikam Sdn Bhd (NSB) manufactures small camping tents. NSB produced 3,000 units during the year. These camping tents sell for RM150 each. NSB had 500 units in finished goods inventory at the beginning of the year. At the end of the year,there were 800 units in finished goods inventory. The following information was supplied by its accountant: Direct labour cost Purchases of raw materials Depreciation of machinery Insurance expenses Factory rent Factory supervision Utilities expenses Indirect labour cost Administration salaries Sales Commission Advertising Materials inventory, May 1 Work in process inventory, May 1 Finished goods inventory, May 1 Materials inventory, May 31 Work in process inventory, May 31 Finished goods inventory, May 31 Additional information: 10,500 15,000 1,000 4,500 2,000 3,000 2,500 3,500 15,000 12,000 20,000 c)Prepare an income statement. 6,000 12,000 2,100 8,000 7,000 800 Only 70% of the utilities expense and 80% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities. Required: a) Compute prime cost, manufacturing cost and cost of goods manufactured. b) Compute cost of goods sold.

Nikam Sdn Bhd (NSB) manufactures small camping tents. NSB produced 3,000 units during the year. These camping tents sell for RM150 each. NSB had 500 units in finished goods inventory at the beginning of the year. At the end of the year,there were 800 units in finished goods inventory. The following information was supplied by its accountant: Direct labour cost Purchases of raw materials Depreciation of machinery Insurance expenses Factory rent Factory supervision Utilities expenses Indirect labour cost Administration salaries Sales Commission Advertising Materials inventory, May 1 Work in process inventory, May 1 Finished goods inventory, May 1 Materials inventory, May 31 Work in process inventory, May 31 Finished goods inventory, May 31 Additional information: 10,500 15,000 1,000 4,500 2,000 3,000 2,500 3,500 15,000 12,000 20,000 c)Prepare an income statement. 6,000 12,000 2,100 8,000 7,000 800 Only 70% of the utilities expense and 80% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities. Required: a) Compute prime cost, manufacturing cost and cost of goods manufactured. b) Compute cost of goods sold.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter2: Basic Managerial Accounting Concepts

Section: Chapter Questions

Problem 58P: Cost of Goods Manufactured, Income Statement W. W. Phillips Company produced 4,000 leather recliners...

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Cost of Goods Manufactured, Income Statement W. W. Phillips Company produced 4,000 leather recliners during the year. These recliners sell for 400 each. Phillips had 500 recliners in finished goods inventory at the beginning of the year. At the end of the year, there were 700 recliners in finished goods inventory. Phillips accounting records provide the following information: Required: 1. Prepare a statement of cost of goods manufactured. 2. Compute the average cost of producing one unit of product in the year. 3. Prepare an income statement for external users.
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