Question 3 The following is an extract from the accounting records of Unite Manufacturers, a sole trader, for the year ended 31 December 2006. Inventory balances 1 January 2006 31 December 2006 P Raw material 90 000 Work in progress 28 000 Finished goods 65 000 P 45 900 43 000 88 400 Transactions for the year ended 31 December 2006 Raw material purchased 52 000 Railage paid on purchases of raw material 1 000 Returns of raw material 7 500 Labour cost 15 500 Water and electricity 500 1 000 20 000 150 000 Repairs to factory machinery Depreciation (machinery) Credit sales Salaries and wages (administrative personnel) 12 000 Additional information a) The total raw material purchased includes indirect material of P10 000 b) Of the total labour cost, 35% is for factory manager's salary, the rest is direct labour cost. c) 1t is estimated that 80% of the water and electricity is used in the factory d) 20% of the depreciation is for the office machinery the balance is for the factory You are required to prepare the following a) The manufacturing cost statement for Unite Manufacturers for the year ended 31 December 2006 (12 marks) b) The income statement for the same business for the year ended 31 December 2006 (8 marks) Clearly show the following: cost of raw material consumed, Prime cost, Cost of goods completed, Gross profit and net profit.