The XYZ manufacturing company shows the following account balances for the finan

Question

The XYZ manufacturing company shows the following account balances for the financial year 2013. Calculate the cost of goods manufactured and the cost of goods sold (in $ 000).

                                                                                                $‘000

Depreciation plant and equipment                           32

Direct materials inventory 1.1.13                                 9

Direct material purchases                                             57

Finished goods inventory 1.1.13                                 12

Indirect materials used                                                  14

Plant repairs and maintenance                                   18

Direct manufacturing labour                                        72

Plant utilities                                                                      31

Fire insurance plant                                                           8

General administrative costs                                       21

Marketing and advertising                                            18

Depreciation plant building                                          14

Customer service cost                                                       9

Work in progress inventory 1.1.13                            18

Work in progress inventory 31.12.13                       22

Finished goods inventory 31.12.13                            24

Direct materials inventory 31.12.13                            7

Indirect manufacturing labour                                    16

Plant supervision                                                              17

Miscellaneous plant overhead                                    30

Explanation / Answer

Schedule of cost of goods manufactured Direct Materials used Direct materials inventory 1.1.13           9 Add: Direct material purchases         57 Total direct materials available         66 Less: Direct materials inventory 31.12.13         (7) Total direct materials used           59 Direct manufacturing labour           72 Manufacturing Overhead: Depreciation plant and equipment         32 Indirect materials used         14 Plant repairs and maintenance         18 Plant utilities         31 Fire insurance plant           8 Depreciation plant building         14 Indirect manufacturing labour         16 Plant supervision         17 Miscellaneous plant overhead         30 Total manufacturing Overhead         180 Total Manufacturing Costs         311 Add: Work in progress inventory 1.1.13           18         329 Less: Work in progress inventory 31.12.13         (22) Cost of goods manufactured         307 Schedule of cost of goods sold Finished goods inventory 1.1.13           12.00 Add: Cost of goods manufactured               307 Total finished goods available for sale         319.00 Less: Finished goods inventory 31.12.13 -24 Cost of goods sold         295.00

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