Manufacturing businesses

Worked examples (10)

• 1Why add a factory profit? (4 marks)
• 2Transfer value of production (3 marks)
• 3Provision for unrealised profit (4 marks)
• 4PURP when inventory is at cost (4 marks)
• 5Change in the provision (5 marks)
• 6A decrease in the provision (4 marks)
• 7Inventory value in the SOFP (4 marks)
• 8Which inventory is affected? (3 marks)
• 9Full effect on profit (5 marks)
• 10The prudence justification (4 marks)

Model answers (10)

• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style

Worked examples (10)

• 1Factory or office cost? (4 marks)
• 2Cost of raw materials consumed (4 marks)
• 3Prime cost (4 marks)
• 4Total factory overheads (5 marks)
• 5Work-in-progress adjustment (4 marks)
• 6Full cost of production (6 marks)
• 7Transfer to the trading section (5 marks)
• 8Apportion a shared cost (4 marks)
• 9Carriage inwards vs outwards (3 marks)
• 10Purpose of the manufacturing account (4 marks)

Model answers (10)

• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style

Worked examples (10)

• 1Cost of sales for a manufacturer (4 marks)
• 2Gross profit (3 marks)
• 3Which section? (4 marks)
• 4Add the factory profit and provision (5 marks)
• 5Deduct non-factory expenses (5 marks)
• 6Transferred at cost (4 marks)
• 7Provision falls (4 marks)
• 8Full profit for the year (6 marks)
• 9Why both factory profit and provision (4 marks)
• 10Spot the misplaced cost (4 marks)

Model answers (10)

• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style

Worked examples (10)

• 1The three inventories (3 marks)
• 2Value finished goods (4 marks)
• 3Total inventories figure (4 marks)
• 4Provision applies to which inventory? (3 marks)
• 5Non-current asset at carrying amount (4 marks)
• 6Current assets total (5 marks)
• 7Capital section (4 marks)
• 8Where was the depreciation charged? (4 marks)
• 9When goods are transferred at cost (3 marks)
• 10Consistency of the provision (4 marks)

Model answers (10)

• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style
• ✓Model answer — 9706 Paper 3 style