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    Question 3

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    Muhd Akmal
    The summary provides the prime cost, manufacturing cost, and cost of goods manufactured for Bonika Sdn Bhd based on the information provided. Prime cost was RM23,500 including raw materials of RM13,000 and direct labor of RM10,500. Manufacturing cost was RM38,350 including factory overhead costs of RM14,850. Cost of goods manufactured was RM43,350. Cost of goods sold was calculated as RM44,650 and an income statement was prepared showing net income of RM311,700.

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    Question 3

    Uploaded by

    Muhd Akmal
    186 views3 pages
    The summary provides the prime cost, manufacturing cost, and cost of goods manufactured for Bonika Sdn Bhd based on the information provided. Prime cost was RM23,500 including raw materials of RM13,000 and direct labor of RM10,500. Manufacturing cost was RM38,350 including factory overhead costs of RM14,850. Cost of goods manufactured was RM43,350. Cost of goods sold was calculated as RM44,650 and an income statement was prepared showing net income of RM311,700.

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    The summary provides the prime cost, manufacturing cost, and cost of goods manufactured for Bonika Sdn Bhd based on the information provided. Prime cost was RM23,500 including raw materials of RM13,000 and direct labor of RM10,500. Manufacturing cost was RM38,350 including factory overhead costs of RM14,850. Cost of goods manufactured was RM43,350. Cost of goods sold was calculated as RM44,650 and an income statement was prepared showing net income of RM311,700.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    186 views3 pages

    Question 3

    Uploaded by

    Muhd Akmal
    The summary provides the prime cost, manufacturing cost, and cost of goods manufactured for Bonika Sdn Bhd based on the information provided. Prime cost was RM23,500 including raw materials of RM13,000 and direct labor of RM10,500. Manufacturing cost was RM38,350 including factory overhead costs of RM14,850. Cost of goods manufactured was RM43,350. Cost of goods sold was calculated as RM44,650 and an income statement was prepared showing net income of RM311,700.

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    Question 3

    Bonika Sdn Bhd (BSB) manufactures small camping tents. BSB produced 3,000 units during
    the year. These camping tents sell for RM150 each. BSB 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:

    RM
    Direct labour cost 10,500
    Purchases of raw materials 15,000
    Depreciation of machinery 1,000
    Insurance expenses 4,500
    Factory rent 2,000
    Factory supervision 3,000
    Utilities expenses 2,500
    Indirect labour cost 3,500
    Administration salaries 15,000
    Sales Commission 12,000
    Advertising 20,000
    Materials inventory, May 1 6,000
    Work in process inventory, May 1 12,000
    Finished goods inventory, May 1 2,100
    Materials inventory, May 31 8,000
    Work in process inventory, May 31 7,000
    Finished goods inventory, May 31 800

    Additional information:
    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.

    c) Prepare an income statement.

    (Total : 15 Marks)
    Bonika Sdn Bhd (BSB)
    Prime Cost, Manufacturing Cost, Cost of Goods Manufactured and
    Cost of Goods Sold

    RM RM
    Raw material inventory on May 1 6,000
    Add: Purchases 15,000
    Material available for use 21,000
    Less: Raw material inventory on May 31 (8,000)
    Material used 13,000
    Add: Direct Labour Cost 10,500
     Prime Cost 23,500
    Add: Factory Overhead Costs:
    Depreciation of machinery 1,000
    Insurance (80%*4,500) 3,600
    Factory rent 2,000
    Factory supervision 3,000
    Utilities (70%*2,500) 1,750
    Indirect labour cost 3,500
    Total Factory Overhead Costs 14,850
     Manufacturing Costs 38,350
    Add: Work in Process inventory on May 1 12,000
    Cost of Goods to be manufactured 50,350
    Less: Work in Process inventory on May 31 (7,000)
     Cost of Goods Manufactured 43,350
    Add: Finished goods inventory on May 1 2,100
    Cost of goods available for sale 45,450
    Less: Finished goods inventory on May 31 (800)
    b) Cost of Goods Sold 44,650
    c) Prepare an income statement

    Bonika Sdn Bhd Income Statement For the Month Ended May 31

    RM RM
    Sales (2,700 units* x RM150) 405,000
    Less: Cost of goods sold (44,650)
    Gross profit 360,350
    Less: Selling and administrative expenses:
    Insurance expense (20% x 4,500) 900
    Utilities expense (30% x 2,500) 750
    Administration salaries 15,000
    Sales commission 12,000
    Advertising 20,000
    Total Selling and administrative expenses 48,650
    Net Income 311,700

    *Units Sold = Units produced + Finished goods beginning in units – Finished goods
    ending in units = (3,000 + 500 – 800) = 2,700

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