Question $1$: Cost Flows

$[30$ marks$]$

Jackson's Dog Food Ltd manufacturers an extensive range of high$-$quality food for dogs. The company is managed by Jason Jackson and employs $15$ people. It has annual sales averaging approximately $$10$ million. Although it has been consistently profitable, Jackson's Dog Food Ltd has experienced increasing pressure from competitors in recent years. The company uses a cost$-$plus approach to pricing but is having to reduce its mark$-$up constantly to maintain market share.

Jason's background is in engineering. The business has never employed an accountant. Instead, a bookkeeper calculates monthly profit as sales revenue minus expenses. Prices are based on rough estimates of the cost of direct material and direct labour inputs plus a $50\%$ markup.

With the decline in profit and constant pressure on prices, Jason began to feel uneasy about the way costs and profits were calculated. The results for the month ending $29$ February $2024$ were:

Jackson's Dog Food Ltd

Profit for the month ending February $2024$

$\backslash$table$[[,$$$,$$