Topic to be tested:
Home Comforts is dealing in the manufacturing of wood products since last two decade in more than 5 cities of Pakistan. The company uses First in First out (FIFO) method for costing its raw materials. On 1st January 2015, the stocks of raw material, work in process and finished goods were Rs. 20,000, Rs. 8,000 and Rs. 3,000 respectively. During the year, material was purchased on 10th January and 15thJuly at Rs. 100,000 and Rs. 60,000 respectively with total freight inward of Rs. 1,000. Direct Labor cost was Rs. 50,000 and marketing manager salary was of Rs. 70,000 while conversion cost was recorded as Rs. 80,000.
At the year end, no inventories were found in hand except work in process which was twice of the balance as on 31st December 2014.
anyone solve this..???
How to proceed with part two, i am slightly confused since units are not given to valuate the inventory on LIFO, please any suggesation....:)
Dears, anybody attepmted this GDB? kindly advise. thanks
isko fifo method se solve kren gy kia..????
kn sy lectr m say h yyy...
1st part ko fifo method say solve karna hai .....aur second part mein describe karna hai k agr fifo k bajaye lifo method use kiya jaye to phr kya impact ho ga total factory cost par.
yar solution dikha do please....
Thanks for explaining but how we can describe part 2, any idea.
see chapter # 15
COST OF MATERIAL CONSUMED
Opening RAW MATERIAL 20000
- closing raw material 0
+ PURCHASE 100000
+ PURCHASES 60000
+ FRIGHT 1000
Cost of material consumed 181000
TOTAL FACTORY COST
DIRECT material 181000
+ DIRECT Labour 50000 OR 181000+ 80000= 261000
+ FACTORY OVERHEAD 30,000 FOH = 80,000-50000=30,000
FACTORY COST 261,000
FACTORY OVERHEAD COST = CONVERSION COST - DIRECT LABOUR
= 80,000 - 50,000
1st part mein closing stock ko sub say akhir mein minus kartay hain