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PROBLEM:

On March 01, 2008, FC Corporation had 250 gallons of material in store at Rs. 5.00 per gallon.

Following were the receipt and issues during March:

March 03: Purchased 1,200 gallons @ Rs. 10 per gallon.

March 07: Issued 650 gallons to job #2325

March 13: 150 gallons were returned to store room.

March 29: Returned to supplier 80 gallons which was purchased on March 3.

Additional Information:

During that period, factory worked for 1,000 direct labour hours. Direct labour was Rs. 9,325 and factory overhead applied rate is Rs. 6.00 per direct labour hour. Actual factory over head for that period was Rs. 7,500.

Following are the year end inventories:

Work in process Rs. 2,450

Finished goods Rs. 4,530

There were no beginning inventories for Work in process and finished goods.

Required:

1. Prepare Material Ledger Card under FIFO costing method. (10 Marks)

2. Prepare Cost of Goods Sold Statement under FIFO. (5 Marks)

Note: Cost of Goods Sold for the period is adjusted for under or over applied factory overhead.

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