Exercise

Amir Ariff (AA) is a medium scale company that manufactures digital photo frames. The company has the following information for the year ended 31 December 2012:

Item | RM |

Work in process inventory, 31 December | 150,000 |

Total manufacturing cost incurred during the year | 660,000 |

Raw materials purchased | 190,000 |

Raw materials inventory, 31 December | 65,000 |

Prime manufacturing costs for the year | 350,000 |

Conversion costs for the year | 400,000 |

Rent | 200,000 |

Sales of digital photo frame to 3rd party | 1,800,000 |

Frame software upgrading cost | 162,500 |

Administrative staff salaries | 80,500 |

Software development staff salaries | 40,000 |

Packaging & design staff salaries | 60,000 |

Packaging | 15,000 |

Utility | 30,000 |

Completed digital photo frame, 1 Jan | 480,000 |

Balance of digital photo frame at ending of period | 250,000 |

Additional information:

1. Only 65% of the rental involved with the manufacturing part, the remaining is for the administrative part.

2. The work in process inventory on 1 January 2012 was 80% of the work in process inventory on 31 December 2012.

3. About 15% of the current sales determined as sales returns and allowances as some of the specifications being rejected by the third party distributors.

4. About 80% of the frame software upgrading cost is being charged to manufacturing.

5. Only software development staff cost is considered under manufacturing.

6. Only 1/3 of utility is being charged to manufacturing.

REQUIRED:

(a) Prepare a complete Schedule of Cost of Goods Manufactured for the year ended 31 December. Show clearly all workings.

(b) Prepare a Statement of Profit and Loss and Other Comprehensive Income for the year ended 31 December.