QUESTION 1

a) Product Cost

ITEMS RM
Beginning direct material 3,400
(+) Direct material purchases 39,000
(-) Ending direct materials (3,800)
TOTAL 38,600

ITEMS RM
Direct Material : 38,600
Direct Labour : 74,280
Manufacturing Overhead : 60,000
TOTAL 172,880

b) Period Cost

ITEMS RM
Advertising 5,000
Administrative expenses 8,575
Salary supervisor 3,000
TOTAL 16,575
QUESTION 2
(a) Prime Cost
ITEMS RM
Beginning direct material 12,000
(+) Direct materials purchase 106,000
(-) Ending direct materials (19,000)
TOTAL 99,000

ITEMS RM
Direct Material : 99,000
Direct Labour : 70,000
TOTAL 169,000

(b) Manufacturing Overhead Cost

ITEMS RM
Factory supervisor salaries 12,000
Factory depreciation expenses 8,000
Ultilities expenses (60% x 100000) 6,000
Indirect labour 21,000
Property taxes on the factory 7,550
Factory supplies used 2,575
Machine maintenances expenses 1,773
TOTAL 58,898
(c) Conversion Cost
ITEMS RM
Direct Labour : 70,000
Manufacturing Overhead : 58,898
TOTAL 128,898

(d) Manufacturing Cost

ITEMS RM
Direct Material : 99,000
Direct Labour : 70,000
Manufacturing Overhead : 58,898
TOTAL 227,898

(e) Non – Manufacturing Cost

ITEMS RM
Saleperson salaries expenses 14,000
Ultilities expenses (40% x 100000) 4,000
Office rental expenses 9,000
Administration salaries expenses 35,000
Freight out 500
Advertising expenses 3,500
Commission cost 6,050
TOTAL 72,050
QUESTION 3

(a) Indirect Manufacturing Cost

ITEMS RM
Factory equipment rental 120,000
Depreciation of factory equipment 70,000
Indirect labour cost 140,000
Factory utilities expenses 90,000
Factory maintenance expenses 78,000
Factory insurance expenses 30,000
TOTAL 528,000

(b) Conversion Cost

ITEMS RM
Direct Labour : 240,000
Manufacturing Overhead : 528,000
TOTAL 768,000

(c) Manufacturing Cost

ITEMS RM
Beginning direct materials 28,200
(+) Direct materials purchases 414,000
(-) Ending direct materials (31,000)
TOTAL 411,000

ITEMS RM
Direct Material : 411,000
Direct Labour : 240,000
Manufacturing Overhead : 528,000
TOTAL 1,179,000
(d) Period Cost

ITEMS RM
Advertising and promotion expenses 150,000
Sales and Administrative salaries 140,000
Depreciation of sales equipment 110,000
Administrative insurance expenses 10,000
TOTAL 410,000

(e) Direct Cost

ITEMS RM
Direct Material : 411,000
Direct Labour : 240,000
TOTAL 651,000
QUESTION 4

(a) Prime Cost

ITEMS RM RM
Direct Material : 230,000
Direct Labour :
Assembly line wages 60,000
Workers' wages stone chair installation 90,000 150,000
TOTAL 380,000

(b) Conversion Cost

ITEMS RM RM
Direct Labour : 150,000
Manufacturing Overhead :
Production supervisor salaries 9,600
Lubricant oil for machine 8,000
Factory building rental 24,000
Factory utility expenses 70,000
Factory supply expenses 9,000 120,600
TOTAL 170,600

(c) Product Cost

ITEMS RM
Direct Material : 230,000
Direct Labour : 150,000
Manufacturing Overhead : 120,600
TOTAL 500,600
(d) Period Cost

ITEMS RM RM
Selling Expenses :
Sales commission 24,000
Advertising expenses 6,000
Depreciation salesperson vehicle 18,000
Freight out 25,000 73,000
Administration Expenses :
Office fire insurance 12,000
Accountant salaries 60,000
Health insurance for top management 13,000 85,000
TOTAL 158,000
QUESTION 5

(a) Direct Labour Cost

= Rm 90 000

ITEMS RM
Direct Labour : 15,000
Direct Material : 75,000
TOTAL 90,000

Direct labour = prime cost – direct material

= RM90,000 – RM75,000
= RM15,000

(b) Manufacturing Overhead Cost

Conversion cost = 360 000

ITEMS RM
Direct Labour : 15,000
Manufacturing Overhead : 345,000
TOTAL 360,000

Manufacturing overhead cost = conversion cost – direct labour

= RM360,000 – RM15,000
= RM345,000
(c) Product Cost

ITEMS RM
Direct Material : 75,000
Direct Labour : 15,000
Manufacturing Overhead : 345,000
TOTAL 435,000