Question
Far Reed Manufacturing Sdn Bhd is a cosmetic manufacturing company located in Sintok. Presented below is an excerpt of the company's trial balance for the
Far Reed Manufacturing Sdn Bhd is a cosmetic manufacturing company located in Sintok. Presented below is an excerpt of the company's trial balance for the year ended 31 December 2016.
Far Reed Manufacturing Sdn Bhd
Trial Balance
As at 31 December 2016
RM
Sales Expenses
70,000
Administration Expenses
45,000
Income Tax Expenses
25,000
Direct Material purchased
550,000
Direct Labour
280,000
Indirect Labour
120,000
Depreciation Expenses - Machine
15,000
Utilities Expenses
45,000
Depreciation Expenses - Factory Building
30,000
Insurance Expenses
20,000
Supplies Expenses
25,000
Other Expenses
30,000
Finished Goods Inventory, 31 December 2016
130,000
Work-in-process Inventory, 31 December 2016
54,000
Direct Material Inventory, 31 December 2016
35,000
Additional information:
(1)The opening inventories balances for the year beginning 1 January 2016 for finished goods, work-in-process and direct materials are RM180,000, RM65,000 and RM30,000 respectively.
(2)Utility, insurance, supplies and other expenses for factory and office are allocated as below:
FactoryOffice
Utility expenses40% 60%
Insurance expenses50% 50%
Supplies expenses 20% 80%
Other expenses 10% 90%
(3)Total sales for the year 2016 are RM2,100,000.
REQUIRED:
(a)Prepare the Statement of Cost of Goods Manufactured for Far Reed Manufacturing Sdn Bhd for the year ended 31 December 2016.
(10 Marks)
(b)Calculate the net profit of Far Reed Manufacturing Sdn Bhd for the year ended 31 December 2016.
(5 Marks)
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