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ACC2101-GROUP PROJECT Prescott Manufacturing operates a few plants, produces a few products, in West Malaysia.

Early in the current year, John Walker was hired as the new manager of the Subang Jaya Plant. At year end, all the plant managers are asked to summarize the operations of their plants at a year-end management meeting. John Walker displayed the following information on a chart as he made his presentation; Current Year Inventories of finished goods: Opening stock of the year (30.000 units in the current year and 10,000 units last year Closing stock of the year (20,000 units in the current year and 30,000 units last year. Cost of finished goods manufactured Walker made the following statements to the Boss; As you know, sales volume has remained constant for the Subang Jaya Plant. Both this year and last, our sales amounted to 100,000 units. We have made real gains, however, in controlling our manufacturing costs. Through efficient plant operations, we have reduced our cost of finished goods manufactured by over RM100,000. These economies are reflected in a reduction of the manufacturing cost per unit sold from RM10.20 last year (RM 1,020,000 / 100,000 units) to RM9.09 in the current year (RM 909,000 / 100,000 units) Alan Carter is owner of Prescott Manufacturing and has little background in the accounting practices of manufacturing companies, and he asks your team for assistance in evaluating Walkers statements. Required: a. Before your analysis, compute the following for Subang Jaya Plant in each of the two years: 1. Cost of goods sold. 2. Number of finished units manufactured 3. Average cost per unit manufactured. 4. Average cost per unit sold b. Comment specifically on Walkers computation of the manufacturing cost of units sold and on whether it appears that the reduction in the cost of finished goods sold was achieved through more efficient operations. (20 marks) 255,000 202,000 909,000 Last Year 85,000 255,000 1,020,000