60.1K

Verified Solution

Link Copied!

QUESTION $4$

$(20$ Marks$)$

REQUIRED

Use the information provided below to prepare the following

$4\mathrm{.}1$ Cost Statement for the year ended $29$ February $2024,$ that shows the cost of goods manufactured and cost of goods sold.

$4\mathrm{.}2$ Income Statement for the year ended $29$ February $2024$

$(16$ marks$)$

$(4$ marks$)$

INFORMATION

The following information was supplied by Kimby Ltd for Product Zap $($which it manulactures$)$ for the year ended $29$ February $2024$ :

Materials:

$\backslash$table$[[$Opening inventory,$200000kg$ at R$4$ per kg$],[$Purchases during the year,$2700000kg$ at R$5$ per kg$],[$Closing inventory,$300000kg$ at R$?$ per kg$],[$Direct labour:$],[$Hours worked during the year,$300000],[$Rate per hour,R$50],[$Manufacturing overheads,Applied on direct labour hours at a rate of R$20$ per hour$]]$

Work in progress:

$\backslash$table$[[$Opening inventory,R$300000],[$Closing inventory,R$400000]]$

Finished goods:

$\backslash$table$[[$Opening inventory,$20000$ units$],[$Manufactured$,168500$ units$],[$Sales$,150000$ units$],[$Selling price per unit,R$280]]$

The following information is also available:

Actual manufacturing overheads for the year ended $29$ February $2024$ amounted to R$6500000.$

The first$-$in$-$first$-$out $($FIFO$)$ method is used to cost inventories.

Manufacturing overheads under$-$applied or over$-$applied must be charged to cost of sales.

The actual cost of the opening inventory of finished goods was R$190$ per unit.

Administrative and marketing costs for the year ended $29$ February $2024$ amounted to R$5000000.$

Answer & Explanation Solved by verified expert

See Answer