Question 1 (14 marks)

The following information has been taken from the accounting records of January Ltd:

The company uses an actual costing system. Sales and expenses have been static for the past few periods.

Variable Selling expenses $79,000

Variable Utilities, factory/plant 8,000

Rent, office 26,000

Depreciation, factory/plant equipment, straight-line 24,000

Purchases of direct materials 81,000

Rent, factory/plant 54,000

Sales 550,000

Insurance, factory/plant 6,000

Fixed Administration expenses 56,000

Indirect materials 12,000

Depreciation, office equipment, straight-line 11,000

Indirect factory/plant labour costs incurred 10,000

Maintenance, factory/plant 35,000

The factory works are paid on average $20/hour and they worked 7,500 hours this year.

Inventories Opening Ending

Direct Materials $14,000 $18,000

Work in Process 30,000 30,000

Finished Goods 28,000 28,000

REQUIRED:

1.Make a schedule of COGM (9 marks) and COGS (3 marks)

2.Based on your numbers above, create the journal entries for the following: (2 marks each)

a. Direct materials used

Account Name Debit Credit

b. Cost of goods manufactured

Account Name Debit Credit

c. Cost of goods sold

Account Name Debit Credit