Problem-09 (Page-86)

The Following information has been taken from the records of Maxwell Company:
Inventories January-01 December-31
Finished goods 5,000/- 7,000/-
Work-in-process 15,000/- 9,000/-
Materials 10,000/- 12,000/-
TK.
Materials purchase 1,00,000/-
Direcet labour 2,00,000/-
Freight in 3,000/-
Sales salaries and expense 25,000/-
Other factory expenses 4,000/-
Freight out 2,000/-
Factory Insurance 12,000/-
Depreciation-Machinery 40,000/-
Purchase Returns and Allownce 5,000/-
Sales 3,50,000/-
Purchase Discount 800/-
Sales Discount 200/-
Prepare a cost of goods sold statement for the year 2004.
Solution:-
Maxwell Company
Cost of goods sold statement
For the period ended 31st December, 2004
Particulars TK. TK. TK.
Raw Materials:
Opening Stock 10,000/-
Purchase 1,00,000/-
Less: Purchase Return 5,000/-
95,000/-
Less: Discount 800/-
94,200/-
Add: Freight In 3,000/-
97,200/-
Raw materials Available for use 1,07,200/-
Less: Closing Stock 12,000/-
Raw Materials Consumed 95,200/-
Direct Labour 2,00,000/-
Prime cost 2,95,200/-
Factory Overhead:
Factory Insurance 12,000/-
Factory Depreciation 40,000/-
Other factory expenses 4,000/-
56,000/-
Cost of Manufacturing 3,51,200/-
Add: opening stock of work-in-process 15,000/-
3,66,200/-
Less: Closing stock of work-in-process 9,000/-
Cost of Goods Manufactured 3,57,200/-
Add: Opening stock of finished goods 5,000/-
3,62,200/-
Less: Closing stock of finished goods 7,000/-
Cost of production/COGS 3,55,200/-
Add: Marketing overhead
Sales salaries 25,000/-
Freight out 2,000/-
27,000/-
Cost of sales 3,82,200/-
Problem-10 (Page-87)
The Following cost and inventory data for the just completed year are taken from the accounting records
of Asiatic Company:
Costs incurred TK.
Advertising expenses 1,00,000/-
Direct labor cost 90,000/-
Purchase of raw Materials 1,32,000/-
Rent, Factory Building 80,000/-
Indirect labor 56,300/-
Sales Commission 35,000/-
Utilities, Factory 9,000/-
Maintenance, Factory Equipment 24,000/-
Supplies, Factory 700/-
Depreciation, Office Equipments 8,0000/-
Depreciation, Factory Equipments 40,000/-

Inventories Beginning of year End of year

Raw Materials 8,000/- 10,000/-
Work-in-process 5,000/- 20,000/-
Finished goods 70,000/- 25,000/-

1. Prepare a schedule of cost of goods manufactured.

2. Prepare the cost of goods sold section of Asiatic Company’s income statement for the year.

Solution:-
Req-01
Asiatic Company
Schedule of Cost of goods manufactured
Particulars TK. TK.
Direct Materials:
Raw materials inventory, beginning 8,000/-
Add: Purchase of Raw materials 1,32,000/-
Raw materials Available for use 1,40,000/-
Less: Raw materials inventory, ending 10,000/-
Raw materials used in production 1,30,000/-
Direct Labour 90,000/-
Manufacturing Overhead:
Rent, Factory Building 80,000/-
Indirect labor 56,300/-
Utilities, Factory 9,000/-
Maintenance, Factory Equipment 24,000/-
Supplies, Factory 700/-
Depreciation, Factory Equipments 40,000/-
Total overhead cost 2,10,000/-
Total Manufacturing cost 4,30,000/-
Add: work-in-process, beginning 5,000/-
4,35,000/-
Less: work-in-process, ending 20,000/-
Cost of Goods Manufactured 4,15,000/-

Req-02
Cost of Goods Manufactured 4,15,000/-
Add: Opening stock of finished goods 70,000/-
Goods Available for sale 4,85,000/-
Less: Closing stock of finished goods 25,000/-
Cost of production/COGS 4,60,000/-
Problem-11 (Page-88)
The Following information has been taken from the accounting records of Klear-Seal Company for last
year:
Selling expenses 1,40,000/-
Raw Materials inventory, January 01 90,000/-
Raw Materials inventory, December 31 60,000/-
Utilities, Factory 36,000/-
Direct labor cost 1,50,000/-
Depreciation, Factory 1,62,000/-
Purchase of raw Materials 7,50,000/-
Sales 25,00,000/-
Insurance, Factory 40,000/-
Supplies, Factory 15,000/-
Administrative expenses 2,70,000/-
Indirect labor 3,00,000/-
Maintenance, Factory 87,000/-
Work-in-process inventory, January 01 1,80,000/-
Work-in-process inventory, December 31 1,00,000/-
Finished goods inventory, January 01 2,60,000/-
Finished goods inventory, December 31 2,10,000/-
Management wants these data organized in a better format so that Financial Statements can be prepared for the
year.
1. Prepare an Income Statement.

Solution:-
Klear-Seal Company
Schedule of Cost of goods manufactured
For the period ended 31st December
Particulars TK. TK.
Direct Materials:
Raw materials inventory, January 01 90,000/-
Add: Purchase of Raw materials 7,50,000/-
Raw materials Available for use 8,40,000/-
Less: Raw materials inventory, December 31 60,000/-
Raw materials used in production 7,80,000/-
Direct Labour 1,50,000/-
Prime Cost 9,30,000/-
Manufacturing Overhead:
Utilities, Factory 36,000/-
Depreciation, Factory 1,62,000/-
Insurance, Factory 40,000/-
Supplies, Factory 15,000/-
Indirect labor 3,00,000/-
Maintenance, Factory 87,000/-
Total overhead cost 6,40,000/-
Total Manufacturing cost 15,70,000/-
Add: work-in-process inventory, January 01 1,80,000/-
17,50,000/-
Less: work-in-process inventory, December 31 1,00,000/-
Cost of Goods Manufactured 16,50,000/-

finished goods inventory, January 01 2,60,000/-

Add: Cost of Goods Manufactured 16,50,000/-
Goods Available for sale 19,10,000/-
Less: Finished goods inventory, December 31 2,10,000/-
Cost of production/COGS 17,00,000/-
Klear-Seal Company
Income Statement For the year ended December 31.
Sales 25,00,000/-
Less: COGS 17,00,000/-
Gross Margin 8,00,000/-
Less: Selling and administrative expenses
Selling Expenses 1,40,000/-
Administrative expenses 2,70,000/-
Total selling and administrative expenses 4,10,000/-
Net Operating Income 3,90,000/-
Problem-12 (Page-90)
A factory produced and sold 1,000 units of a product in the month of June 2010, for which the Following
particulars are available:
Stock of raw materials on 1st June 6,000/-
Purchase and receipt of raw materials during the month of June 1,44,000/-
Direct wage paid in cash in June (Which Included) 55,000/-
Tk. 3,000/- on account of May and Tk. 2,000/- advance for July
Works Overhead charges for the month 60,000/-
th
Stock of raw materials on 30 June 10,000/-
administration and Selling Overhead tk. 25 per unit
Sales Price tk. 300 per unit
From the above particulars you are required to prepare:
(a) A statement of cost for the month of June, 2010
(b) Estimate the sales price of a unit of the same products in July, 2010, assuming-
1. 10% increase in the cost of raw materials
2. 10% increase in direct wages
3. 5% increase in works overhead charges
4. 20% decrease in administration and selling overhead charges
5. Same percentage of profit on sales price as earned during the month of June
Solution:-
Req-(a)
Statement of Cost (For the month of July, 2010)
Output: 1,000 Units
Particulars TK. TK.
1. Materials Used:
Opening stock of Raw materials 6,000/-
Add: Purchase of Raw materials 1,44,000/-
Raw materials Available during the period 1,50,000/-
Less: Closing Stock of Raw materials 10,000/-
Raw materials used in production 1,40,000/-
2. Direct Wages
Paid In June 2010 55,000/-
Less: Payment for May 2010 3,000/-
Less: Payment for July 2010 2,000/-
50,000/-
Prime Cost 1,90,000/-
3. Works overhead 60,000/-
Works or Factory cost 2,50,000/-
4. administration and selling overhead @ tk. 25 per unit 25,000/-
Total cost / cost of sales 2,75,000/-
5. Profit (Balancing figure) 25,000/-
Total Sales ( 1,000 units @ tk. 300 per unit) 3,00,000/-
Calculation of profit percentage on sales price for the month of June:
(Profit/Total Sales) x 100 = (25,000/3,000) x 100 = 8.33%
If Sales 100 and Profit 8.33% then cost (100-8.33) = 91.67.
So, Profit on cost = (8.33/91.67) th
Req-(b)
Estimated of per unit sales price (For the month of July, 2010)
Particulars TK. TK.
Direct materials (1,40,000/1,000) 140/-
Add: increase 10% 14/-
154/-
Add: Direct wages (50,000/1,000) 50/-
Add: increase 10% 5/-
55/-
Prime cost 209/-
Add: Works overhead (60,000/1,000) 60/-
Add: increase 5% 3/-
63/-
Works cost 272/-
Add: administration and selling overhead 25/-
Less: Decrease 20% 5/-
20/-
Total cost 292/-
Add: Profit (8.33%of sales i. e. (8.33/91.67)th of cost 26.53
Estimated Selling Price 318.53
Ans: Estimated Selling Price per unit tk. 318.53
Problem-13 (Page-91)
The Following data are from the accounts of Modhumoti Company:
Inventories July 01, 2015 June 30, 2016
Finished goods 20,000/- 28,000/-
Work-in-process 60,000/- 25,000/-
Materials 40,000/- 48,000/-
TK.
Sales Discount 8,000/-
Purchase Discount 3,200/-
Sales 18,00,000/-
Purchase Returns and Allowance 20,000/-
Depreciation - Factory Machinery 1,60,000/-
Factory Insurance 50,000/-
Freight out 8,000/-
Other factory expenses 16,000/-
Bond interest expense 50,000/-
Sales salaries 1,00,000/-
Freight in 12,000/-
Direct factory labor 8,00,000/-
Materials purchase 4,00,000/-
Advertising Expenses 12,000/-
Prepare a cost of goods manufactured statement for the year ended June 30, 2016.

Solution:-
Modhumoti Company
Cost of goods manufacture statement
For year ended June 30, 2016
Particulars TK. TK. TK.
Raw materials July 1, 2015 40,000/-
Purchase 3,200/- 4,00,000/-
Less: Purchase Discount 20,000/-
Purchase Return and allowances 23,200/-
3,76,800/-
Add: Freight In 12,000/- 3,88,800/-
Raw materials Available for use 4,28,800/-
Less: Raw materials June 30 48,000/-
Direct Materials Consumed 3,80,800/-
Direct Factory Labor 8,00,000/-
Depreciation - Factory Machinery 1,60,000/-
Factory Insurance 50,000/-
Other factory expenses 16,000/-
Total Factory Overhead: 2,26,000/-
Cost of Manufacturing 14,06,800/-
Add: work-in-process, July 01, 2015 60,000/-
14,66,800/-
Less: work-in-process, June 30, 2016 25,000/-
Cost of Goods Manufactured 14,41,800/-