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MGT402 Cost & Management Accounting Assignment 1 Solution Fall 2013

Assignment:
Macro Manufacturing Ltd. (MML) – a famous footwear brand in Karachi has 40 stores across the city.
The company has gained reputation because of stylish and well-designed footwear for ladies and men.

At the end of financial year 2012-13 company’s owner is desirous to know the amount of profit earned
during the year. The records of MML show following information for the financial year 2012-13:
i. During the year, direct material of Rs. 20,000 was purchased; direct labor cost incurred is Rs.
24,000.
ii. Other expenses incurred are:
Details Rs.
Insurance expired – building 3,500
Indirect labor 23,000
Power, heat and light 35,000
Repair & Maintenance of machinery 15,000
Salaries of marketing staff 1,200
Depreciation of Factory 25,000
Other manufacturing expenses 22,000
Rent of building 4,500
Distribution expenses 5,000
iii. Sales during the financial year were of Rs. 874,500 (800 units).
iv. As on June 30, 2013, the company has cash of Rs. 66,000, debtors Rs. 12,000, plant and
machinery Rs. 99,000, account payables Rs. 3,500 and current liabilities are of Rs. 250.
v. Position of inventories is as follows;
1st July 2012 30th June 2013
Raw materials Rs. 34,000 Rs. 15,500
Work in process Rs. 22,000 Rs. 13,000
Finished goods Rs. 33,000 (40 units) ? (30 units)

Required:
a) Cost of goods manufactured and sold statement for the year ended June 30, 2013 Marks: 15
b) Income statement for the year ended June 30, 2013. Marks: 05

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