Section D

Manufacturing Cost Statements

$20$ Marks

Question $5$

Study the scenario and complete the question that follows:

Red Wine Circus

The following is an extract from the accounting records of Red Wine Circus, a sole trader.

$\backslash$table$[[,1$ Mar $2018,28$ Feb $2019],[$Inventory balances,,$],[$Direct materials,$80000,60000],[$Work$-$in$-$progress,$35000,34900],[$Finished products,$50000,75000],[$Transactions for the year ended $28$ February $2019$:$,],[$Direct materials purchased on credit,$11500,],[$Carriage on materials,$15500,],[$Returns of direct materials,$63000,],[$Direct labour cost,$7500,],[$Rates and electricity,$10000,],[$Repairs to factory Plant,$20000,],[$Depreciation $($factory Plant$),150000,],[$Credit sales,$120000,],[$Cost of sales,$18000,],[$Salaries and wages $($administrative personnel$),,]]$

Additional information

The total of direct materials purchased on credit includes indirect materials amounting to R$17000,$ all of which were issued to the manufacturing process.

The factory manager's remuneration is calculated as $40\%$ of the direct labour cost.

It is estimated that $90\%$ of the rates and electricity are used in the factory.

A constant manufacturing profit of $12\%$ is added to completed products transferred to the marketing department.

Red Wine Circus uses a perpetual inventory system.

Source: Waka, L$.2023$

Page $9$ of $14$

Required

Prepare the manufacturing cost statement of Red Wine Circus for the year ended $28$ February $2019.$

$(20$ Marks$)$

End of Section D