| 1.69 | Unnamed: 1 | Unnamed: 2 | Unnamed: 3 | Unnamed: 4 | SOLUTION |
|---|---|---|---|---|---|
| Atkens PLC | |||||
| Manufacturing Account for the year ended 31 March Year 5 | |||||
| £OOO | £OOO | ||||
| Raw Materials Cost | |||||
| Opening Inventory (Raw Materials) | 45 | ||||
| Add Purchases | 575 | ||||
| Less Purchases Returns | 0 | 575 | |||
| 620 | |||||
| Add Carriage In | 15 | ||||
| 635 | |||||
| Less Closing Inventory (Raw Materials) | 50 | ||||
| COST OF RAW MATERIALS CONSUMED | 585 | ||||
| Add Direct Costs | |||||
| Production Wages | 200 | 200 | |||
| PRIME COST OF MANUACTURE | 785 | ||||
| Add Factory Overheads | |||||
| Rates (8-2) | 6 | ||||
| Repairs to Machinery | 3 | ||||
| Insurance of Property | 9 | ||||
| Factory Management Salaries | 18 | ||||
| Indirect Expenses (20+5) | 25 | ||||
| Depn - Machinery (10%x180) | 18 | 79 | |||
| 864 | |||||
| Add Inventory - Work in Progress at Start | 60 | ||||
| 924 | |||||
| Less Inventory - Work in Progress at End | 54 | ||||
| FACTORY COST OF PRODUCTION | 870 | ||||
| Manufacturing Cost per Unit | |||||
| Factory Cost of Production | 870000 | ||||
| Units | 100000 | ||||
| 8.7 | |||||
| Direct Costs | Indirect Costs | ||||
| Can be identified with items being produced | Can only be linked with products as a whole | ||||
| Traceable to a unit of goods being made | Known as overheads | ||||
| Forms part of the Prime Cost | Cannot be easily directly identified with the individual items being produced | ||||
| Arises solely from existence of items being manufactured | Existence of this cost does not solely depend on the units being manufactured | ||||
| This type of cost is common or shared by 2 or more things being manufactured. |