Coolum Pty Ltd manufactures sunglasses that are sold to department stores, pharmacies, optical dispensers and optometrists. During the current year, Coolum Pty Ltd produced 60 000 pairs of sunglasses. Owing to increased competition and unseasonally wet weather affecting sales of sunglasses, the company operated at only 60 per cent of its normal capacity. Other than costs associated with raw materials, variable costs are indicated by (V) and fixed costs are indicated by (F).Coolum Pty Ltd uses the first-in, first-out (FIFO) cost-flow method.

REQUIRED

1. Prepare a statement showing the cost of goods manufactured.

2. Prepare a statement of profit or loss and other comprehensive income extract showing the cost of goods sold and identifying those costs that are recognised as expenses in the current period.

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Opening finished goods inventory (units) 5 000 Opening finished goods inventory Closing finished goods inventory (units) 15 000 Opening value of raw materials inventory Closing value of raw materials inventory $40 000 $20 000 $10 000