cd ltd a company engaged in the manufacture of specialist marine engines operates a 610020

CD Ltd, a company engaged in the manufacture of specialist marine engines, operates a historic job cost accounting system that is not integrated with the financial accounts. At the beginning of May 2000 the opening balances in the cost ledger were as follows:

During the month, the following transaction took place:

£12 500 of the above gross wages were incurred on the construction of manufacturing equipment, £35 750 were indirect wages and the balance was direct. Production overheads: the actual amount incurred, excluding items shown above, was £152 350; £30 000 was absorbed by the manufacturing equipment under construction and under-absorbed overhead written off at the end of the month amounted to £7550. Royalty payments: one of the engines produced is manufactured under license. £2150 is the amount that will be paid to the inventor for the month’s production of that particular engine. Selling overheads: £22 000. Sales: £410 000. The company’s gross profit margin is 25% on factory cost. At the end of May stocks of work in progress had increases by £12 000. The manufacturing equipment under construction was completed within the month, and transferred out the cost ledger at the end of the month.

Required:

Prepare the relevant control accounts, costing profit and loss account, and any other accounts you consider necessary to record the above transactions in the cost ledger for May 2000.