Manufacturing account

Example 1

The following data has been extracted from the books of D Scaife Ltd. At 31 December 2001:

Dr Cr
£ £
Stocks at 1 January 2001:
Raw materials 12,500
Work in progress 7,650
Finished goods 18,900
Purchases of raw materials 89,000
Sales 215,000
Direct labour 32,000
Rent and rates 18,000
Electricity 8,000
Office salaries 43,000
Depreciation for the year:
Factory 7,000
Office 3,000

Additional information

1. Stocks at 31.12.01:
£
Raw materials 11,250
Work in progress 8,420
Finished goods 21,530
2. Rent, rates and electricity are to be apportioned: Factory 75%, Office 25%
3. Finished goods are to be transferred to the trading account at a profit of 20% on factory cost.