Case Study 1 Scenario: You are employed by SMBS as a Management Accountant and one of their clients, Clarence Ord Ltd would like you to prepare the following information and bring it to the next management meeting being held next week. Please prepare a Manufacturing, Trading and Income Statement for the year ending 30th June, 2022 from the following information: The trial balance for SMBS, for the year ended 30 June 2022 is as follows: $ $ 157 800 Capital 47 700 Office furniture and equipment - Admin (at cost) 20 400 Accumulated depreciation-office furniture and equipment 88 500 Factory plant and equipment (at cost) 36 750 Accumulated depreciation-plant and equipment 71 415 Accounts receivable Prepaid rates and insurances (as at 1 July 2021) 1 020 Inventories as at 1 July 2021: Direct materials 31 500 Indirect materials 2 850 Work in process 32 565 Finished goods 42 480 Bank overdraft (interest rate 10% p.a.) 22 800 Accounts payable 31 680 Sales 635 400 Purchases-direct materials 145 200 Purchases-indirect materials 17 970 Freight inwards-direct materials 7 200 Wages and salaries paid-direct labour 115 425 Wages and salaries paid-indirect labour 48 510 Wages and salaries paid-Sales 99 765 Freight outwards 10 950 Sales commissions 12 705 Rent 33 000 Rates and insurances paid 6 150 Sundry factory overhead 9 900 General office and administration expenses 68 940 Financial expenses (including interest on overdraft of $1950) 11 085 904 830 904 830 sessment 3_FNSACC517 v2.docx O Provider No Page 4 of 12 Ver. 2 - May 20TAFE South WESTERN AUSTRALIA Metropolitan Assessment Coversheet AT3 Case Studies Other adjustments required at 30 June 2022: Depreciation of all non-current assets is 15% p.a. using the straight-line method. Allocation of rent, rates and insurances is 50% to administration and 50% to the factory. Prepaid rates and insurances are $1410. . Wages incurred but not paid are: -direct factory labour $ 3 000 -indirect labour$ 1 590 Inventories are: -direct materials $32 220 -indirect materials $ 3 540 -work in process $36 810 -finished goods $50 250 Case Study 2 SMBS also provides consulting services to manufacturers. Contracts with clients (jobs) are quoted and costed on the following basis: 1 600 Working hours: Annual average working hours per person Total annual working hours 12 800 Salaries: An hourly rate based on the salary level of the employee used plus 32% for benefits and on costs and average working hours per person. The average salary levels per annum are: Professional Engineers $80 000 Technicians $46 000 Administration/Secretarial $32 000 Computer time: A charge per employee hour spent on the client is based on budgeted computer cost of $102 400 per annum (including depreciation and maintenance of hardware and software) and total annual working hours. To be charged out based on total "Hours recorded on job", being 168 hours. Direct costs: Any costs incurred or items purchased on behalf of the client are charged to the cost of that job.SMBS w Manufacturing Statement for the year ended 30 June 2021 $ $ $ Direct Materials Stock on hand - 1 July 2020 Purchases Freight inwards 10 11 Less Stock on hand - 30 June 2021 12 13 Direct labour 14 Direct labour incurred 15 ($ 16 Factory Overhead 17 ndirect materials 18 Stock on hand - 1 July 2020 19 Purchases 20 21 Less Stock on hand - 30 June 2021 22 23 Indirect labour 24 Factory rent 25 Rates and insurances 26 Sundry factory overhead 27 Depreciation - Plant and Equipment 28 ($ % ) 29 Total factory cost incurred for the period 30 Add Work in Progress at 01/07/2020 31 32 Less: Work in Progress at 30/06/2021 33 Cost of Production 34 35 36 37 38 39 Trading and Income Statement for the year ended 30 June 2021 40 $ $ $ 41 Sales 42 Less Cost of goods sold 43 Stock 1 July 2020 44 Cost of production 45 Goods available for sale 46 less Stock 30 June 2021 47 Gross profit 48 49 Less Expenses 50 51 Selling & Distribution 52 Wages - sales 53 Freight out 54 Sales commission 55 56 General & Admin 57 Rent ($ %) 58 Rates and insurance ( % x ($ + $ - $) 59 Depreciation - Office Furniture & Epuipment ($ x %) 60 General and admin 61 62 Financial 63 Financial expenses 64 Net Profit 65 66 67