Q6. Han plc is nine month old since established to manufacture different parts of a manual irrigation pump. The company owners failed to maintain a formal accounting record for the nine months of operation with the presumption that the volume of activity is small and can thus be effectively administered by them. Lately, they have discovered the importance of maintaining an accounting record. Assume that the firm hires you and your first duty is to prepare a six month income statement covering the period from January 1, to June 30. The company management is capable of supplying actual data on some items but the rest are estimates. You are given the following actual data. 1 Sales for the first six month is Br.240, 000 2. Inventory January 1. Direct material Work in process - 12,000 8,800 ----28,500 Finished goods 3. The gross margin is fairly estimated at 40% of sales, and direct labor is estimated to be one third of conversion cost and one fourth of prime cost. 4. The period cost is totally estimated at 54,000 and marketing cost is estimated to be 40%. 5. Physical count of all inventories made as of June 30 reveals the following. Direct material - 9,000 Work in process --7,500 Finished goods --52,000 Required a) Calculate the cost of goods sold b) Calculate the cost goods manufactured