Question $3$

A$.$ Bonika Sdn Bhd $($BSB$)$ manufactures small camping tents. BSB produced $3,000$ units during the year. These camping tents sell for RM$150$ each. BSB had $500$ units in finished goods inventory at the beginning of the

year.At the end of the year, there were $800$ units in finished goods inventory. The following information was supplied by its accountant:

$\backslash$table$[[,$RM$],[$Direct labour cost,$10,500],[$Purchases of raw materials,$15,000],[$Depreciation of machinery,$1,000],[$Insurance expenses,$4,500],[$Factory rent,$2,000],[$Factory supervision,$3,000],[$Utilities expenses,$2,500],[$Indirect labour cost,$3,500],[$Administration salaries,$15,000],[$Sales Commission,$12,000],[$Advertising$,20,000],[$Materials inventory, May $1,6,000],[$Work in process inventory, May $1,12,000],[$Finished goods inventory, May $1,2,100],[$Materials inventory, May $31,8,000],[$Work in process inventory, May $31,7,000],[$Finished goods inventory, May $31,800]]$

Additional information:

Only $70\%$ of the utilities expense and $80\%$ of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities.

Required:

a$)$ Compute prime cost, manufacturing cost and cost of goods manufactured.

$(8$ marks$)$

b$)$ Compute cost of goods sold.

$(2$ marks$)$

c$)$ Prepare an income

$(5$ marks$)$

statement.

$($Total: $15$ Marks$)$

$5$