Question
(a) A number of manufacturing costs are listed below: No Cost Description 1. Insurance on manufacturing equipment. 2. Steel plates used in making a car.
(a) A number of manufacturing costs are listed below:
No | Cost Description |
1. | Insurance on manufacturing equipment. |
2. | Steel plates used in making a car. |
3. | Wages of assembly workers. |
4. | Wages of plant security personnel. |
5. | Grease used in engines of a car. |
6. | Rubber used in making tires. |
7. | Depreciation costs of a plant. |
8. | Cost of electricity to operate machines. |
9. | Wages of plant manager. |
10. | Quality inspection costs. |
Required:
for each item above, indicate whether the cost is MAINLY direct or indirect with respect to the products.
(Your answer should be stated as follows: Example: 12 Direct or 13 Indirect)
(b) Explain why costs should be classified as controllable and uncontrollable in particular for managers. Use relevant examples.
(c) Green Company, a manufacturing company, had a cost of goods manufactured of RM408,000 for the month June. The company purchased raw materials costing RM292,000. The beginning balance in the raw materials account was RM104,000 and the ending balance was RM156,000. The beginning balance in the finished goods account was
RM168,000 and the ending balance was RM184,000.
Required:
(i) calculate the cost of raw materials used in production during June.
(ii) calculate cost of goods sold for June.
(ii) calculate the operating profit or loss for June if the company sold 51,000 units of
products at a price of $12 per unit.
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