REQUIRED

Use the information provided below to prepare the:

4.1

Cost Statement for the year ended 28 February 2018, that shows the cost of goods manufactured and cost of goods sold.

(16 marks)

4.2

Income Statement for the year ended 28 February 2018.

(4 marks)

INFORMATION

The following information was supplied by Jehcon Ltd for Product Kip (which it manufactures) for the year ended 28 February 2018:

Materials:

Opening inventory (80 000 kg)

R600 000

Purchases during the year (1 080 000 kg)

R8.10 per kg

Closing inventory: Quantity

120 000 kg

Direct labour:

Hours worked during the year

480 000

Rate per hour

R30.00

Manufacturing overheads

Applied on direct labour hours at a rate of R18 per hour

Work in progress:

Opening inventory

R600 000

Closing inventory

R480 000

Finished goods:

Opening inventory

24 000 units

Manufactured

120 000 units

Sales

110 400 units

Selling price per unit

R750

The following information is also available:

Actual manufacturing overheads amounted to R8 352 000.

The first-in-first-out (FIFO) method of costing inventories is used.

Manufacturing overheads under- or over-applied must be charged to cost of sales.

The actual cost of the opening inventory of finished goods was R285 per unit.

Administrative and marketing costs for the period amounted to R6 720 000.