Assingment Acc ii

KOLEJ PROFESIONAL MARA BANDAR MELAKA
FINANCIAL ACCOUNTING FOR BUSINESS 2
ACC1023
MANUFACTURING ACCOUNT
CLASS:
DBF 2A
PREPARED FOR:
MADAM MUNIRAH
DATE OF SUBMISSION:
24 APRIL 2021

PREPARED BY:

NAME ID NUMBER

NUR AISYAH BINTI AZRI (BMF20-11-013)
NUR HAZIRAH HAFIZZA BINTI HAZDI (BMF20-11-014)

NUR ATHIRAH NABILLA BINTI MOHD HAFIZ (BMF20-11-020)

NURUL NASUHA BINTI ROSLAN (BMF20-11-024)
NIK ANIS NORISYA BINTI NIK MAZLIM (BMF20-11-025)

1

TABLE OF CONTENTS

NO. CONTENTS NUMBER OF
PAGES
1 AKNOWLEDGEMENT
2 INTRODUCTION 3
3 THE BACKGROUND OF COMPANY 4
4 PRODUCT 5
5 MAIN PRODUCT 6
6 MANUFACTURING ACCOUNT 7
7 STATEMENT OF PROFIT OR LOSS 8
8 STATEMENT OF FINANCIAL POSITION 10
9 CONCLUSION 11
10 APPENDICES 12
13 – 17

2

ACKNOWLEDGEMENT

In the name of Allah, the Most Gracious and the Most Merciful.
All praises to Allah and His blessing for the completion of this assignment. I thank God for all the
opportunities, trials and strength that have been showered on me to finish writing the assignment. I
experienced so much during this process, not only from the academic aspect but also from the aspect of
personality. My humblest gratitude to the holy Prophet Muhammad (Peace be upon him) whose way of life has

been a continuous guidance for me.
First and foremost, I would like to sincerely thank my lecturer Madam Munirah, for her guidance,
understanding, patience and most importantly, she has provided positive encouragement and a warm spirit to

finish this thesis. It has been a great pleasure and honour to have him as my supervisor.
Thank all my group members who were together through thick and thin. Our group members are Aisyah,

Hazirah, Athirah, Nasuha and Nik Anis, for having cooperation in completing this assigned task.
Last but not least, we hopefully, all the efforts will give a lot of benefits to us. Everyone in the group gives
such incredible ideas and opinions on our project in order to improve our project in so many ways. Thank to
them wholeheartedly. May God shower the above cited personalities with success and honour in their life.

3

INTRODUCTION

This is an accounting statement that helps in the preparation of final accounts of manufacturing concern of a
firm. Certain manufacturing concerns do not prepare cost accounts since they do not have any cost office.

These manufacturing concerns ascertain the manufactured cost of goods and also the manufacturing profit or
loss during the year. Likewise, the cost of production of the manufactured goods and the profit or loss made
by the manufacturing department is found out by the preparation of and account. So, when the required data
are presented in a convenient form, it is called manufacturing account. Generally, the cost of production or the

cost of goods manufactured is exhibited by the preparation of manufacturing account which helps the
calculation of manufacturing trading and profit and loss account.

The cost – effectiveness of activities related to manufacturing is better done with manufacturing account.
Ascertaining the cost of goods, transferring this cost to the trading account is important. The trading account

shows a gross profit. Manufacturing account is prepared to find out the cost of goods sold which includes
direct expenses and it deals with raw materials and work in progress and not the finished goods. All the
production expenses like depreciation on plant and machinery, salary to the factory managers, wages, etc are
debited. The cost of finished goods includes direct expenses and the cost of raw materials. Manufacturing
account format does not have any standardised format. The manufacturing account format must show

quantities and values.

The cost of goods sold is found out by the preparation of manufacturing account. Manufacturing trading profit
and loss account is maintained by all manufacturing organisations to help in the formation of final accounts of
manufacturing concern. Manufacturing overhead account is calculated by the addition of the indirect factory
expenses like machine repairs, depreciation, insurance, factory supply, electricity, etc. generally manufacturing
overhead t account is prepared to have a standardized form of account. Non-manufacturing entities or what is
called trading entities are generally involved in the purchase and also sale of goods at a profit. Usually , it is

the manufacturing account and trading account, profit and loss account and balance sheet in addition. The
cost of goods manufactured format includes the cost of raw materials and all the direct expenses.

4

THE BACKGROUND OF COMPANY

Hanan Chocolate and Confectionery Sdn Bhd is a chocolate company. It was established in
2021 and their aim is excellence and focusing on producing the very best chocolates for both local

and global markets. Our factory is located in the small town of Desa Serdang at the southern
zone of Kuala Lumpur. Hanan Chocolate started with manufacturing consumer-packed chocolates and then

were sold to duty-free shops and supermarkets across the country to increased
their product lines to provide diverse range of chocolate products to fulfil the promise to offer high

quality chocolates to the customers.
Hanan Chocolates now become well-loved consumer brand throughout the country and beyond.

The company’s vision is to become leading international chocolatier that emphasis on
excellence and perfection by creating the finest and most indulgent chocolates with the spirit of
innovation. Our mission is our passionate about the art of the chocolate- making and they are
continuously striving to create perfect premium chocolates that will put a smile on our customer’s

face. We will continue to use nothing but the finest quality ingredients and implement strict
operational procedures to ensure that the chocolates produced are perfect.

Hanan Chocolate is the premium chocolate brand and is exported to overseas to many countries in the
world. It offers more than 100 varieties of chocolates. We offer chocolate lovers some of the finest
selection in the region. The bar chocolate all the way down to no sugar added chocolates. The
product is made from cocoa beans from Ghana and it always give continuous improvements in the
quality and feature of product.

5

PRODUCT

Using only top-quality ingredients, we are ensured of chocolates that retain the same great taste every time.
These top-quality ingredients include beans from West Africa, natural vanilla and pure cocoa butter. All our

ingredients receive the same care and attention to detail.
But the best materials are only one piece of the puzzle. To provide the great taste of Hanan chocolate, we are
constantly researching and developing new manufacturing methods and products. After all, variety is the spice

of life, isn't it?
To that end, Hanan Chocolate today offers more than 80 varieties to suit your every mood and desire. That's a

list that is growing constantly.

6

MAIN PRODUCT

• Dragees
o Secrets
o Tiramisu
o Jar
o Box
o Tin

• Chocolate Bars
o Camior
o 100 Gram Bars
o Bars
o No Sugar Added
o Granola

• Cravings
o Variety
o Wafer
o Fruity
o Dark
o Snow Flower
o Nuts

• Gifts
o Pralines
o Gifts & Hampers
o Raya Gifts Selection

• Cookies
o Butter Cookies
o Coconut Roll
o Sandwich

7

HANAN CHOCOLATE
MANUFACTURING ACCOUNT FOR THE YEAR ENDED 31 MARCH 2021

Add Purchase Raw Material 5 000 29 140
7 490 (28 160)
Less: Closing inventories of raw Material
Cost of Raw Material Consumed 2 700 980
1 960
Direct Labour 12 490
Wages for Machine operator 13 100 13 470
Wages paid for the chocolate workers 16 020
3 270 4 660
Direct Expenses 1 000 18 130
Direct factory expenses
Direct wages 751 34 141
52 271
PRIME COST 11 910
(10 780) 1 130
Factory Overhead Expenses: 53 401
Factory sundry expenses 3 701
Factory electricity expenses 57 102
Indirect wages
Depreciation of plant and machinery
Utilities

Total Production Cost
Add: Opening work in progress
Less: Closing work in progress

PRODUCTION COST OF COMPLETED GOODS

+Manufacturing Profit

Total production cost/Market Value to be transferred to SOPOL

8

a. Inventories at 31 March 2021 were valued as follows: 28 160
52 300
Raw materials 10 780
Finished goods
Work in Progress

b. Depreciation of plant and machinery 20% on cost and depreciation of motor vehicle 20% on cost
c. Market value of manufactured good is RM 57 102.

d. Cost price:
Market value: 57 102
Unit want to produced: 2500
Cost per unit =57102/ 2500
=RM 22.84

e. Selling price per unit : RM 24.00
SALES : 24 X 2 500
= RM 60 000

9

HANAN CHOCOLATE

STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 31 MARCH 2021

Sales 60 000
Less: Cost of goods Sold
Add: Production cost of completed goods 53 401

Less: Closing inventories of Finished goods (52 300) (1101)
GROSS PROFIT 500 58 899
Add: Manufacturing profit 430 3 701
62 600
(+) Revenues
Discount Received 930
Commission Received 63530

(-) Expenses 16 050 29 350 (52 730)
Administrative Expenses 13 300 6 590 10 800
General Expenses 5 310 16 790
Office Expenses 1 280
Selling and Distribution Expenses 16550
Bad debts
Depreciation of Motor Vehicle 240
Financial Expenses
Bank interest
Interest in debenture
NET PROFIT

10

HANAN CHOCOLATE

STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2021

Non-Current Assets RM RM RM
Plant & Machinery 4 000
Motor Vehicle 5 000 (1 000) 3 960
6 400 (2 440) 7 960
Current Asset
Inventory: 52 300 28 760
Finished good (28 160) 36 720
Raw Materials (10 780)
Work in Progress 30 200
Cash at bank 5 200
Account Receivable 10 200

Financed By: 20 000
Capital 10 800
Add: Net profit 30 800
(600)
Less: Drawings

Non-Current Liabilities 1 200
20% debentures

Current Liabilities 5 000
Account Payables 320
Bank Overdraft
36 720

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CONCLUSION

In conclusion, cost accounting systems are considering an invaluable asset for manufacturing facilities. The
accuracy they provide small and large organizations with the monitoring of inventory, products produced,

products sold and reporting features, they play a large part in a company’s overall success.
Today, manufacturing industry has become an important sector in promoting economic growth in Malaysia.
However, the accident cases in the manufacturing sector are always higher than other sectors most of the
time. In order to reduce the accident cases, safety culture is the long-term solution that creates consistent
patterns of safety behaviours, beliefs and values in the organization. Therefore, safety culture should be given
equal attention like other important elements such as quality and productivity. If profit and loss is so crucial to
a manufacturing company, safety should be treated as crucial as profit and loss because it can determine the

success or failure of an organization

12

REFLECTION

NAME : NUR AISYAH BINTI AZRI
ID NUMBER : BMF20-11-013
CLASS : DBF2A

While doing assignments, I found the advantage of working as part of a group. I learned that good teamwork
is the key to success in doing assignment when time and resources are limited. Since everyone has their own
point of view, a lot of different ideas can be generated, but when doing too many assignments the
misunderstandings we face become difficult. such as, we are unable to settle the financial position of the
statement to obtain balance. I hope I can improve on this topic and also work together with my group.

13

REFLECTION

NAME : NUR HAZIRAH HAFIZZA BINTI HAZDI
ID NUMBER: BMF20-11-014
CLASS: DBF2A
What I learn after finished this assignment is the correct way of calculation. I have a problem when my count
is out of balance. My teammates helped me to correct the calculation method so that the amount balance. I
hope I will not repeat the mistake in the future. I will also be able to leverage this manufacturing method on
my future.

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REFLECTION

NAME: NUR ATHIRAH NABILLA BINTI MOHD HAFIZ
ID NUMBER: BMF20-11-020
CLASS: DBF 2A
Doing this assignment, I had some difficulty doing it. Among them is in terms of online discussions. While a
group of my friends were at the college which made it easier for them to have face-to-face discussions and
faster. That made me understand the meaning of cooperation and understand each other. The way I deal with
the problem is by not making the discussion by video call but by typing only. I learned that accounts affect the
inputs and outputs of our business.

15

REFLECTION

NAME: NURUL NASUHA BINTI ROSLAN
ID NUMBER: BMF20-11-024
CLASS: DBF2A
Things that I learned from doing this assignment was first I learned how to determine the amount we need to
put in a column. Therefore, we need to review all work to avoid errors in calculations. Like, I put the wrong
number in the column then the calculation would be completely wrong. I think that manufacturing accounts
should improve business to make this company fully successful.

16

REFLECTION

NAME : NIK ANIS NORISYA BINTI NIK MAZLIM
ID NUMBER: BMF20-11-025
CLASS: DBF2A
The thing that I had learned from this assignment are preparing a list of manufacturing item. It was rather
difficult than I think. Fortunately, I have the best group member that help me to list down all the
manufacturing item. Even sometimes I list a wrong item for manufacturing. They will reprimand my mistake
and come out with another idea. I think that this manufacturing need to be improve to get higher profit more
than now.

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