Use the information provided below to prepare the:

4.1

Cost statement for the year ended 28 February 2019 that shows the cost of goods manufactured and cost of goods sold.

(16 marks)

4.2

Income Statement for the year ended 28 February 2019.

(4 marks)

INFORMATION

The following information was supplied by Schutte Ltd for Product A (which it manufactures) for the year ended 28 February 2019:

Materials:

Opening inventory (96 000 kg)

R480 000

Purchases during the year (864 000 kg)

R6.00 per kg

Closing inventory: Quantity

80 000 kg

Direct labour:

Hours worked during the year

384 000 hours

Rate per hour

R24.00

Manufacturing overheads

Applied on direct labour hours at a rate of R14.40 per hour

Work in progress:

Opening inventory

R480 000

Closing inventory

R384 000

Finished goods:

Opening inventory

19 200 units

Manufactured

96 000 units

Sales

88 320 units

Selling price per unit

R600

The following information is also available:

Actual manufacturing overheads amounted to R4 454 400.

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 R228 per unit.

Administrative and marketing costs for the period amounted to R5 376 000.