IGCSE Accounting Paper-1: Specimen Questions with Answers 334 - 335 of 338
Passage
Gulzar opened a toy car factory on 1 May 2019. He provided the following information at the end of his first accounting year.
| $ | ||
| Purchases of raw materials | 14000 | |
| Direct factory wages | 9800 | |
| Indirect factory wages | 7500 | |
| Factory insurance | 300 | |
| General factory expenses | 200 | |
| Carriage inwards | 650 | |
| Factory Electricity | 900 | |
| Stock at 30 April 2020: | ||
| Raw materials | 1000 | |
| Work in progress | 1550 | |
| Finished goods | 2850 |
Factory machinery, $20000, was purchased on 1 May 2019 and is to be depreciated by 10 % per annum.
Question 334 (4 of 8 Based on Passage)
Write in Brief
One Liner▾Define and give one example of each of the following types of inventory. (Marks 2)
(I) Raw materials
Explanation
Raw Materials are inputs which are used to manufacture other things by further processing them. These form part of finished goods
In the manufacturing plastic toy car, plastic granules is a raw material.
Question 335 (5 of 8 Based on Passage)
Write in Short
Short Answer▾Prepare the manufacturing account for the year ended 30 April 2020. (Marks 10)
Gulzar
Manufacturing Account for the year ended 30 April 2020
| $ | $ |
Explanation
Gulzar
Manufacturing Account for the year ended 30 April 2020
| $ | $ | |
| Cost of materials used- | ||
| Purchases of materials | 14000 | |
| Carriage Inwards | 650 | 14650 |
| Less: Closing stock of raw materials | 1000 | |
| 13650 | ||
| Direct Factory Wages | 9800 | |
| Prime Cost | 23450 | |
| Factory Overheads- | ||
| Indirect Factory Wages | 7500 | |
| General Factory Expenses | 200 | |
| Factory Electricity | 900 | |
| Factory Insurance | 300 | |
| Depreciation on Factory Machinery | 2000 | 10900 |
| 34350 | ||
| Less: Closing Work in Progress | 1550 | |
| Cost of Production | 32800 |
Depreciation on Factory Machinery =
The cost of production was much higher than Gulzar expected.