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:

Â	£
Stores ledger control account	85 400
Work in progress control account	167 350
Finished goods control account	49 250
Cost ledger control account	302 000

 

During the month, the following transaction took place:

Â	£
Materials:	Â
Purchases	42 700
Issues to production	63 400
to general maintenance	1 450
to construction of manufacturing equipment	7 650
Factory wages:	Â
Total gross wages paid	124 000

 

£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.