Question

Question 4:

Hello Manufacturing Systems Pty Ltd provides the following information:

Administrative salaries Advertising expense Direct labour Factory depreciation Finished goods, 1 July 2015		$  120 000 2 000 23 000 8 000 23 000
Finished goods, 30 June 2016		10 000
Income tax expense		30% of income before Profit
Indirect labour		20 000
Materials inventory, 1 July 2015		42 000
Materials inventory, 30 June 2016		36 000
Materials purchased		15 000
Sales		208 000
Work in process, 1 July 2015		15 000
Work on process, 30 June 2016		10 000

Required

A Calculate total manufacturing costs for the period ending 30 June 2016.

B. Calculate cost of goods manufactured for the period ending 30 June 2016.

C. Calculate cost of sales for the period ending 30 June 2016.

D. Calculate profit or loss after tax for the period ending 30 June 2016.

Answer 1

a)Total mfg cots= materials used+ labour+mfg overhead
material used= beg mat inv+material purchased-ending inv
=42000+15000-36000=21000
total mfg costs=21000+23000+8000+20000=72000
b)cost of goods mfg= Beg WIP+total mfg cots-ending WIP
=15000+72000-10000=77000
c)cost of sales= Beg finished goods+cost of goods mfg-ening goods
=23000+77000-10000=80000
d)profit= sales-cost of sales-ad salaries-ad expense-income tax expense
=(208000-80000-120000-2000)*(1-30%)
=4200