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Question 3 The following information is an extract of a year end trial balance of MR Manufacturing Sdn Bhd as at 31 December 2018. MR

Question 3

The following information is an extract of a year end trial balance of MR Manufacturing Sdn Bhd as at 31 December 2018.

MR Manufacturing Sdn Bhd

Trial Balance

As at 31 December 2018

Debit

(RM)

Credit

(RM)

Cash

26,000

Accounts Receivable

49,000

Finished Goods Inventory, 1 January 2018

24,000

Work In Process Inventory, 1 January 2018

10,200

Raw Materials Inventory, 1 January 2018

9,400

Equipment

300,000

Accumulated Depreciation-Equipment

60,000

Accounts Payable

130,000

Capital

80,000

Sales

990,000

Direct Labour

124,000

Raw Material Purchases

305,000

Indirect Labour

106,500

Factory Supplies Expenses

24,000

Maintenance Expenses of Factory Equipment

80,500

Utility Expenses

82,000

Rent Expenses

57,000

Depreciation Expenses

12,000

Insurance Expenses

22,400

Selling Expenses

28,000

Total

1,260,000

1,260,000

Additional Information:

  1. Inventories as at 31 December 2018:

RM

Raw materials

2,500

Work in process

10,000

Finished goods

7,500

  1. Utility, rent and depreciation expenses for factory and office are allocated as below:

Factory

Office

Utility Expenses

80%

20%

Rent Expenses

80%

20%

Depreciation Expenses

90%

10%

Insurance Expenses

90%

10%

REQUIRED:

  1. Prepare a Statement of Cost of Goods Manufactured for the year ended 31 December 2018 for MR Manufacturing.
  2. Differentiate between conversion and prime cost.
  3. Differentiate between product cost and period cost.

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