- 10 Marks
MI – Mar-Jul 2020 – L1 – SB – Q2b – Costing Techniques
Prepare ledger accounts for a backflush accounting system based on the given data for production and sales.
Question
XYZ operates a backflush accounting system with the following standard costs:
- Raw materials (5Kg per unit) @ N230 per Kg
- Personnel cost @ N300 per unit
- Overheads @ N750 per unit
During a period, the following was achieved:
- Raw materials purchased: 24,500 Kg
- Production: 4,800 units
- Sales: 4,600 units
There was no opening stock, and the triggers used for initiating accounting entries are:
- Purchase of raw materials;
- Sale of finished goods.
Required:
Prepare the following ledger accounts:
i. Combined raw materials and work-in-progress (WIP)
ii. Conversion cost
iii. Cost of goods sold
iv. Period expenses
Find Related Questions by Tags, levels, etc.
- Tags: Backflush Accounting, Cost Management, Costing Techniques, Ledger Preparation
- Level: Level 1
- Topic: Costing Techniques
- Series: MAR/JULY 2020
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