You are given the cost records of PQR manufacturing company which manufacture a specialised equipment against customers order.

OMR

Raw material Opening - 15,000

Purchase of material 14,000 kgs@ 2 per kg- 28,000

Carriage on purchase - 600

Raw material closing - 6,000

Opening stock of WIP - 2,500

Closing stock of WIP - 2,800

Direct labour cost - 22,000

Depreciation:

Factory building - 400

Office building - 300

Salary

Factory manager - 1200

Office manager - 1,500

Other factory overheads - 2,600

Other office overheads - 1,600

Finished goods:

Opening - 5,800

Closing - 2,500

Selling and distribution overheads 10% of cost of goods sold

Selling price is determined at 12% on sales

Units produced - 500 units

Required:

a. Prepare a statement of cost ,showing clearly cost incurred at different stages of production and sale . Also calculate profit and sales price per unit. 7 Marks

Q2.

Consider opening work in progress in process II -5000 units - 35% complete; Units completed in process-II and transferred to next process is 5500 units; Closing work in progress 2800 units 40% complete. Assuming normal loss and abnormal loss as nil calculate:

a. Input into the process II( in units) 1.5 Marks

b. Equivalent units as per FIFO. 1.5 Marks