These transactions and balances were extracted from the records of Caskets Ltd, a business that makes coffins.

Additional information:

• 20% of wages is non-manufacturing and R36 560 of the balance is indirect labour.

• Electricity and power are allocated 80% to the factory.

• Insurance includes R15 985 that is directly related to the factory.

• The total area of the buildings on which rates and taxes are levied is 2 000 m2 of which 1 500 m2 are occupied by factory buildings.

You are required to:

1. Record the journal entries to record the above information using the periodic inventory system. (All payments were made in cash and narrations are not required.)

2. Calculate the cost of one coffin.

3. Calculate the gross profit made by Funerals Ltd (the company used the FIFO method
of cost assignment).

Transcribed Image Text:

Balances Inventory of coffins (1 January 20x5) (1 500 units) Inventory of raw material (1 January 20x5) Work-in-progress (1 January 20x5) Transactions Raw material purchases Freight inwards on raw material Railage inwards on raw material Railage on sales Wages Electricity and power Depreciation: Machinery Furniture Credit sales (4 300 units) Maintenance - machinery Insurance Rates and taxes Rent - factory building 412 500 00 67 200 00 14 300 00 574 169 00 18 966 00 24 365 00 36 492 00 584 000 00 66 776 00 22 500 00 7 500 00 1 935 000 00 18 295 00 18 000 00 16 400 00 25 500 00