LEARNING OBJECTIVES: • To develop understanding of the elements involved in the cost of goods sold statement of manufacturing concerns.
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Following information is extracted from the books of a manufacturing concern on 31st December 2019.
Particulars Rs. Particulars Rs.
Opening stock of raw material 13,000 Furniture and Fixtures 72,000
Plant and Machinery 98,000 Bank charges 5,453
Cash in hand 12,800 Cost of material available for use 62,000
Opening inventory of finished goods 8,000 Cost of direct material used 50,000
Sundry creditors 54,000 Direct labour cost 10,000
Sundry debtors 20,000 Factory overhead cost 5,000
Loan taken from bank 44,300 Sales 85,000
Cost of goods available for sale 75,000 Gross profit 21,000Required:
Based on the above information, you are required to calculate the amount of:- Purchases
- Prime cost
- Cost of goods manufactured
- Conversion cost
- Cost of goods sold



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