A manufacturing company produces a single product. The following data for the year are given (all amounts in $\text{₦ thousands}$):\n\n- Opening raw materials inventory: $40$\n- Purchases of raw materials: $180$\n- Closing raw materials inventory: $30$\n- Opening work‑in‑progress (WIP): $25$\n- Closing WIP: $35$\n- Direct labour incurred: $120$\n- Manufacturing overhead is applied at 150 % of direct labour cost.\n- Overhead actually incurred: $200$ (difference will be adjusted at year‑end).\n- Opening finished goods inventory: $50$\n- Closing finished goods inventory: $45$\n- Sales revenue: $600$\n- Selling and distribution expenses: $50$\n- Administrative expenses: $40$\n\nDetermine (a) the total manufacturing cost of goods produced, (b) the cost of goods sold after adjusting for overhead variance, (c) the gross profit, and (d) the amount of under‑applied overhead to be transferred to profit or loss.

Question

Accepted Answer

Total manufacturing cost (COGM): 480,000; Adjusted cost of goods sold: 505,000; Gross profit: 95,000; Under‑applied overhead transferred: 20,000 (all figures in ₦).

Neco Model Questions Vol1 2021 Financial Accounting Question 25

Answer Options

About This Question

Master the Exam!