Accounting – 5.5 Manufacturing accounts | e-Consult
5.5 Manufacturing accounts (1 questions)
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Calculation:
- Direct Materials Consumed: £15,000 - £3,000 = £12,000
- Direct Labour: £10,000
- Factory Overheads: £7,000
- Total Factory Costs = £12,000 + £10,000 + £7,000 = £29,000
- Cost of Goods Sold (COGS) = Opening Stock + Production Cost - Closing Stock
- COGS = £4,000 + £29,000 - £3,000 = £30,000
Answer: The factory cost of production is £29,000 and the cost of goods sold is £30,000.