In the absence of a chief accountant, you have been asked to prepare a month’s cost accounts for a company which operates a batch costing system fully integrated with the financial accounts. The following relevant information is provided to you:
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Balance at the beginning of the month: |
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Stores ledger control a/c |
25,000 |
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Work-in-progress control a/c |
20,000 |
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Finished goods control a/c |
35,000 |
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Pre-paid production overhead brought forward from previous month |
3,000 |
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Transactions during the month: |
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Materials purchased |
75,000 |
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Materials issued |
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To production |
Rs. 30,000 |
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To factory maintenance |
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34,000 |
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Materials transferred between batches |
5,000 |
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Total wages paid– |
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Direct workers |
Rs. 25,000 |
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Indirect workers |
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30,000 |
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Direct wages charged to batches |
20,000 |
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Recorded non-productive time of direct |
5,000 |
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workers |
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Selling and distribution overheads incurred |
6,000 |
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Other production overheads incurred |
12,000 |
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Sales |
1,00,000 |
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Cost of finished goods sold |
80,000 |
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Cost of goods completed and transferred into finished goods during the month |
65,000 |
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Physical value of work-in-progress at the end of the month |
40,000 |
The production overhead absorption rate is 150% of direct wages charged to work-in-progress
Prepare the following accounts for the month:
- Stores ledger control A/c
- Work-in-progress control A/c
- Finished goods control A/c
- Production overhead control A/c
- Profit and loss A/c