P2–12 Cost behaviour; manufacturing statement; unit costs Time allowed: 40 minutes Visic Company, a manufacturing firm, produces a single product. The following information has been taken from the company’s production, sales, and cost records for the just completed year.

The finished goods stock is being carried at the average unit production cost for the year. The selling price of the product is £50 per unit.
Required 1 Prepare a schedule of goods manufactured for the year.
2 Compute the following:

(a) The number of units in the finished goods stock at the end of the year

(b) The cost of the units in the finished goods stock at the end of the year.
3 Prepare a profit and loss account for the year.

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Production in units 29,000 Sales in units ? Ending finished goods stock in units ? Sales in pounds 1,300,000 Costs: Advertising 105,000 Entertainment and travel 40,000 Direct labour 90,000 Indirect labour 85,000 Raw materials purchased 480,000 Building rent (production uses 80% of the space administrative and sales offices use the rest) 40,000 Utilities, factory 108,000 Royalty paid for use of production patent, 1.50 per unit produced ? Maintenance, factory Rent for special production equipment, per year plus 0.30 per unit produced Selling and administrative salaries Other factory overhead costs Other selling and administrative expenses Stocks: Raw materials Work in progress Finished goods 9,000 7,000 ? 210,000 6,800 17,000 Beginning of year End of year 20,000 30,000 50,000 0 40,000 ?