question 1

Far Reed Manufacturing Sdn Bhd is a cosmetic manufacturing company located in Sintok. Presented below is an excerpt of the companys 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: Factory Office Utility expenses 40% 60% Insurance expenses 50% 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.