Cost Accumulation and Cost Assignment - Product Cost

Try this for an exercise!

Baked by AS having its operation in Seri Gombak is currently producing various delicacies for hotels and resort for Klang Valley and its sorroundings. During the month of August 2018, the company purchased RM160,000 of raw materials consist of flour, whipped cream and cheese. Direct labour hours worked during the period were 10,000 hours and the workers were paid at the rate of RM8 per hour. The company also incurred direct expenses such as baking soda, fat etc for a total of RM64,000. The production overheads for the month were RM88,000.

The selling price for a batch 10 boxes of Pavlova was RM6,000. The company also incurred a selling cost of RM96,000 which includes sales commission and facebook advertisements. The administration cost for the month was RM30,000.

Below are the relevant information regarding the production of Pavlova for the month;

                                                      1 August 2018                31 August 2018

Raw materials stock                            RM26,000                     RM48,000

Work-in-progress stock                        RM45,000                     RM22,000

Finished goods stock                           RM12,800                     RM27,500

Required:

1. Determine the cost of raw materials consumed in production and the prime costs.
2. Calculate the cost of goods sold manufactured for the month of August 2018.
3. Calculate the cost of one batch of Pavlova, assuming 60 batches were completed during August 2018.
4. Prepare a cost of goods sold statement for the month of August 2018.
5. Determine the number of batches sold in the month of August 2018.
6. Prepare an income statement for the month of March 2018.

See you in class!