A manufacturer makes two types of articles “ L” and “M”. They undergo two processes-namely, factory and finishing. Raw materials used in the factory and general expenses are apportioned in the ratio of output of each class. The output for the year that ended on 31 December 2009 was 6,000 for “ L” and 4,000 for “M”. The actual cost of labour for each process is ascertained. Other charges for each process are apportioned in the ratio of finishing wages.
From the following particulars, prepare a statement of the cost per article of each item in each process in the cost of manufacture and the profit per article. The selling prices are Rs. 500 and Rs. 400, respectively.
“Factory” raw materials:
|
“Factory” raw materials: |
|
|
Opening stock |
4,00,000 |
|
Purchases |
20,00,000 |
|
Closing stock |
6,00,000 |
|
“Finishing” raw materials: |
|
|
Opening stock |
1,50,000 |
|
Purchases |
6,50,000 |
|
Closing stock |
2,00,000 |
|
Factory wages |
|
|
L |
2,00,000 |
|
M |
1,50,000 |
|
Finishing wages |
|
|
L |
1,50,000 |
|
M |
1,00,000 |
|
Factory charges |
6,00,000 |
|
Finishing charges |
2,00,000 |
|
General expenses |
2,40,000 |