QUESTION 6(20 Marks)

Khumalo Limited incurred the following costs last month:

Sales/Revenue

R1800 000

Other income

R225 000

Expenses:

R420 000

Marketing and selling expenses

R270000

Administrative expenses

R150 000

Purchases of raw materials

R300 000

Direct labour

R405 000

Manufacturing overheads:

R630 000

Indirect materials

R7500

Indirect labour

R150000

Utilities, factory

R120000

Property taxes, factory

R54 000

Insurance, factory

R13500

Equipment rental, factory

R105000

Depreciation

R180000

But

some of the goods sold this month were produced in previous months

some of the costs listed above were incurred to make goods that were not sold this month.

Assume that actual MOH = applied MOH.

Therefore

cost of goods sold does not equal the sum of the above costs

we need to determine the values of the various inventories.

Additional data for Khumalo Limited are given below:

Raw materials:

Opening raw materials inventory

Purchases of raw materials

Closing raw materials inventory

R15000

R300000

R45 000

Raw materials used in production

R?

Work-in-process inventory:

Opening work-in-process inventory

Total manufacturing costs

Closing work-in-process inventory

Cost of goods manufactured (i.e. finished)

R60000

R?

R90000

R?

Finished goods inventory:

Opening finished goods inventory

Cost of goods manufactured (i.e. finished)

Closing finished goods inventory

Cost of goods sold

R195000

R?

R120000

R?

Required:

6.1 Prepare a statement of cost of goods manufactured and sold

6.2 Prepare a statement of comprehensive income