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Ray Corp. provides the following data for the year 20X7:
Factory overhead is applied at the rate of 75% of direct labor cost. 3,900 units were sold during
20X7 at Rs. 200 per unit. Inventory accounts showed following opening and closing balances:
Jan. 1 Dec. 31
Raw Materials Rs. 27,000 Rs. 17,000
Work in Process 29,500 13,000
Finished Goods 25,000 ?
Finished Goods (units) 200 300
Required:
Using the above data, determine following for the year 20X7:
1. Number of units manufactured (1 Point)
2. Unit cost of finished goods (1 Point)
3. Value of finished goods (2 Points)
4. Cost of goods sold statement at normal and at actual (5 Points)
5. Gross profit (1 Point)
Note: Please follow proper format and provide complete working and formulas where
necessary
Solution:
2. Cost per unit = Cost of goods manufactured (at normal) / No of units manufactured
= 470, 000 / 4,000
= Rs. 117.5
Or
Cost per unit = Cost of goods manufactured (at actual) / No of units manufactured
= 450,900/ 4,000
= Rs. 112.72
3.
Cost of Finished Goods Inventory = Closing finished goods x per unit cost
= 300 x 117.5
= Rs. 35, 250
5. Sales 780,000
(-) Cost of goods sold 440,650
Gross profit 339,350