QUESTION 1
Syntoq Co. manufactures numerous types of sports shoe. Due to high demand for the product and capacity constraints, the company has decided to manufacture and at the same time purchase finished product and resell the product. The company's trial balance as at 31 October 2014 is shown below:
|
Syntoq Co.
Trial Balance as at 31 October 2014
|
|
|
RM
|
RM
|
|
Cash in hand
|
19,050
|
|
|
Accounts receivable
|
13,800
|
|
|
Inventories (1 October 2014):
Direct materials
Work in process
Finished goods
|
4,950
6,600
3,000
|
|
|
Plant and machineries (net)
|
99,000
|
|
|
Delivery van (net)
|
76,500
|
|
|
Accounts payable
|
|
13,200
|
|
Capital
|
|
186,000
|
|
Sales revenue
|
|
261,750
|
|
Sales return
|
1,950
|
|
|
Sales discount
|
2,940
|
|
|
Purchase of direct materials
|
115,710
|
|
|
Purchase of finished goods
|
23,550
|
|
|
Purchase return - finished goods
|
|
1,650
|
|
Salaries expenses:
Direct labor
Indirect labor
Administration
|
21,600
14,700
16,650
|
|
|
Factory rental expense
|
8,100
|
|
|
Insurance expense
|
15,000
|
|
|
Depreciation expenses
|
7,500
|
|
|
Utility expenses
|
4,000
|
|
|
Repair and maintenance expenses
|
8,000
|
|
|
|
462,600
|
462,600
|
Additional information:
1. Inventories as at 31 October 2014:
|
Direct materials
|
RM7,800
|
|
Work in process
|
RM5,850
|
|
Finished goods
|
RM10,200
|
2. Insurance expense includes RM4,500 insurance for administration.
3. Depreciation expenses includes RM1,500 for delivery van and RM6,000 for plant and machinery.
4. Half of utility expenses are related to factory and another half for general office.
5. 60% of repair and maintenance expenses are distributed to factory.
REQUIRED:
(a) Prepare the Statement of Cost of Goods Manufactured for Syntoq Co. for the month of October 2014.
(b) Calculate the gross profit for the company for October 2014.
(c) Explain the difference between "period cost" and "product cost". Provide TWO (2) examples for each type of cost.