Question No. 2:

MS KP MM Corporation is a manufacturer that produces cosmetics. The following information has been taken from the company's production, sales, and cost records for the just completed year:

The finished goods inventory is being carried at the average unit production cost for the year. The selling price of the product is Rs 32 per unit.

Required:

A. Make Cost of Goods Manufactured Statement for the year.

B. Compute the number of units and cost of units in the finished goods inventory at the end of the year.

C. Make Income Statement for the year under Absorption costing Method.

D. Compute the following cost:

i. Prime cost

ii. Conversion cost

iii. Inventoriable cost

iv. Non-Manufacturing cost

E. Prepare T accounts of the following

i. Work in process

ii. Finished goods

Production in units 100,000 ? Sales in units Ending finished goods Inventory in units ? Sales in Rupees Rs 2,000,000 Costs : Rs 40,000 Rs 22,000 Rs 240,000 Rs 50,000 Rs 60,000 Rs 100,000 Other selling and administrative expenses Other factory overhead costs Selling and administrative salaries Maintenance Factory Utilities factory Building Rent (Production Uses 80% of the Space; administrative and sales offices use the rest) Royalty paid for use of Production patent, Rs 0.5 per unit produced) Rent for special production equipment, Rs 5000 per year plus Rs 0.2 per unit produced) Insurance factory equipment Cleaning supplies, factory Depreciation Factory Advertising cost ? ? Rs 20,000 Rs 10,000 Rs 18,000 Rs 600,000 Direct labor Rs 80,000 Indirect labor Rs 20,000 Property taxes, factory Rs 10,000 Raw material purchased Rs 200,000 Inventories End of year Beginning of year Rs. 0 Finished goods ? Work in process Rs 50,000 Rs 60,000 Raw materials Rs 20,000 Rs 10,000