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Solution 1.

Material Ledger Card Under FIFO Costing Method

Material Received / Material issued / Return Balance

Purchased
Date Material Per Amoun Material Per Amount Material Per Amount
in Gallons Gallon t in Rs. in Gallon in Gallons Gallon
(QTY) cost Gallons cost (QTY) cost
(QTY)
Mar.2008 Glen Rs. Rs. Glen Rs. Rs. Glen Rs. Rs.

1 250 5.00 1250/

3 1200 10 12000 250 5.00 1250/

1200 10 12000/

7 250 5.00 1250 800 10 8000/

400 10 4000
650

13 150 10 1500 150 10 1500/

800 10 8000/

29 80 10 800 70 10 700/
800 10 8000/

MAR 29 870 10 8700/

CLOSING INVENTORY ACCORDING TO FIFO IS 870 GALLONS @ 10 EACH TOTAL RS
8700.

Solution 2:
Cost of Goods Sold Statement under FIFO

Amount
Opening Inventory 250 Gallon at 5 each 1250

Add Purchases 1200 Gallon at10 each 12000

Less Purchase Return 80 Gallon at 10 each (800)

Net Purchases 11200

Cost of Material for use 12450

Less Closing Inventory (8700)

Direct Material Consumed 3750

Add Direct labor 9325

Prime Cost 13075

Add F.O.H applied Cost for the period 1000 hrs at 6 each 6000

Total Factory Cost 19075

Less Ending work in Process Inventory (2450)

Cost of Good Manufactured and available for sale 16625

Less Ending Inventory Finished Goods (4530)

 Cost of Goods Sold at Normal 12095
Add Under Applied Factory Overhead Cost 1500
(Actual FOH – Applied FOH)
Actual Cost of Goods Sold 13595

Working Note...
FACTORY OVERHEADS 7500
APPLIED FACTORY OVERHEADS (6000)
UNDER APPLIED FACTORY OVERHEADS 1500

Muhammad Soban
0333-7637637