QUESTION 3 Jane Doyle provides the following information. Inventories 1 August 20*8 31 July 20*9 Raw materials 17,650 23,510 Work in progress 8,570 7,340 Finished goods 10,760 10,740 Purchases of raw materials 203,510 Wages - direct labour 123,930 indirect labour 58,900 sales staff 67,500 office staff 37,320 Rent and rates - factory 37,800 office and showrooms 18,450 Factory power 38,900 Lighting and heating expenses - factory 9,450 office and showrooms 6,210 Insurances - factory 14,620 offices and showrooms 5,990 Depreciation - machinery 87,000 office equipment 13,450 delivery vehicles 9,800 Carriage - inwards 1,350 outwards 870 Required Prepare a) A manufacturing account for the year ended 31 July 20*9. (b) An extract from the income statement for the year ended 31 July 20*9. Sometimes the managers of a business will wish to gauge how efficiently their factory is operating. They compare the price that the goods cost to produce in the factory with the cost of purchasing the same amount of goods from an 'outside' supplier. If it would be cheaper to purchase the goods externally then it may be in the best interest of the business to cease manufacturing and purchase the goods. (But see marginal costing and social costing later)