[Cost Sheet Practical Problems and Solutions, Cost Accounting, Cost Sheet Format, All Universities of India, B.Com]
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In this post, you will get cost sheet practical problems and solutions which are asked Various B.Com Exams. Also go through Part 1 , Part 2 and Part 4 of cost sheet problems and solutions for more.
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Cost Sheet Practical Problems and Solutions (Part 3)
17.
The books of manufacturing company present the following data for the month of
April, 2011: Direct labour cost Rs. 17,500 being 175% of works overhead. Cost
of goods sold excluding administrative expenses Rs. 56,000. Inventory accounts
showed the following opening and closing balances:
|
Particulars |
April
1 (Rs.) |
April
30 (Rs.) |
Rs. |
|
Raw materials Work-in-progress Finished goods Other data are: Selling
expenses General and
administration expenses Sales for the
month |
8,000 10,500 17,600 |
10,600 14,500 19,000 |
3,500 2,500 75,000 |
You are required
to:
a) Compute the value of raw materials purchased;
and
b) Prepare a cost statement showing the various
elements of cost and also the profit earned.
Cost Sheet or
Statement of Cost
|
Particulars |
Amount
(Rs.) |
|
Opening stock
of Raw Material Add: Purchases
(Note – 1) Less: Closing
Stock of raw material |
8,000 36,500 10,600 |
|
Raw material
consumed during the year Add: Direct
Labour |
33,900 17,500 |
|
Prime Cost Add: Works
overhead: |
51,400 10,000 |
|
Adjustment for
work-in-progress: Opening 10,500 Closing
(-) 14,500 |
61,400 (-) 4,000 |
|
Works cost or
cost of production Add: Opening
stock of finished goods |
57,400 17,600 |
|
Less: Closing
stock of finished goods |
75,000 19,000 |
|
Cost of goods
sold Add: General
and administration expenses Add: Selling
expenses |
56,000 2,500 3,500 |
|
Profit
(Balancing figure) |
62,000 13,000 |
|
Sales |
75,000 |
Note – 1:
Statement computing the value of Raw materials purchased
|
Cost of goods
sold Add: Closing
Stock of finished goods |
56,000 19,000 |
|
Less: Opening
stock of finished goods |
75,000 17,600 |
|
Work Cost or
Cost of production Add: Closing
Stock of work-in-progress |
57,400 14,500 |
|
Less: Opening
Stock of work-in-progress |
71,900 10,500 |
|
Less: Works
overhead: (100/175*17,500) |
61,400 10,000 |
|
Prime Cost Less: Direct
Labour |
51,400 17,500 |
|
Raw Materials
consumed Add: Closing
Stock of raw materials |
33,900 10,600 |
|
Less: Opening
Stock of raw materials |
44,500 8,000 |
|
Value of Raw
materials purchased |
36,500 |
18.
A factory produces and sells 1,000 units of a product in July, 2011, for which
the following particulars are available:
|
Particulars |
Amount
(Rs.) |
|
Stock of direct
materials on 1.7.11 Purchase and
receipt of direct materials in July, 2011 Direct wages
paid in cash in July, 2011 (which includes
Rs. 3,000 on account of June 2011 and an advance of Rs. 2,000) Works overhead
charges for the month Stock of direct
materials on 31.7.11 Administration
and selling overheads Sales price |
6,000 1,44,000 55,000 60,000 10,000 Rs. 25 per unit Rs. 300 per unit |
From the above
particulars you are required to:
a) Prepare a cost statement for July, 2011; and
b) Estimate the sale price of a unit of the same
product in August, 2011, assuming: (i) 20% increase in direct materials cost;
(ii) 10% increase in direct wages; (iii) 5% increase in works overhead charges;
(iv) 20% reduction in administration and selling overhead charges; and (v) same
percentage of profit on sales price as in July, 2011.
Cost Sheet
Output: 1,000
units (See Note – 1)
Period: July,
2011
|
Particulars |
Amount (Rs.) |
Cost Per Unit |
|
|
Materials
Consumed: Stock as on
1-7-11 Purchases
during the month |
6,000 1,44,000 |
||
|
Less: Stock as
on 31-7-11 |
1,50,000 10,000 |
1,40,000 |
140 |
|
Direct Wages
(paid In July) Less: Payment
for June |
55,000 3,000 |
||
|
Less: Advance
payment |
52,500 2,000 |
50,000 |
50 |
|
Prime Cost Add: Works
overhead |
1,90,000 60,000 |
190 60 |
|
|
Works cost or
Cost of Production Add:
Administration and selling overheads @ Rs. 25 per unit |
2,50,000 25,000 |
250 25 |
|
|
Cost of Sales Profit
(Balancing figure) |
2,75,000 25,000 |
275 25 |
|
|
Selling Price @
Rs. 300 [Seen Note – 1] |
3,00,000 |
300 |
|
Estimate of
Selling Price per unit in August, 2011
Note – 1:
|
Direct
Materials: (120/100*140) Direct Wages:
(110/100*50) Prime Cost Works Overhead:
(105/100*60) |
168.00 55.00 223.00 63.00 |
|
Works Cost or
Cost of Production Administration
and Selling overhead: (80/100*25) |
286.00 20.00 |
|
Cost of Sales Profit [@8.33%
on sales or 1/12th of sales or 1/11th of
cost] [See Note – 2] |
306.00 27.82 |
|
Selling Price |
333.82 |
Working Note:
Ratio of Profit to sales in July, 2011 = (25,000/3,00,000*100) = 1/12th or
8.33%
19. The following
figures are extracted from the books of an iron foundry after the close of the
year:
|
Particulars |
Amount (Rs.) |
|
Raw Materials:
Opening stock
Purchase during the year
Closing stock Direct wages Works overhead Stores overhead
on materials |
14,000 1,00,000 10,000 20,000 50% on direct
wages 10% on the cost
of materials |
10% of the
castings were rejected being not up to specification and a sum of Rs. 800 was realised
from sale of scrap, 10% of the finished castings were found to be defective in
manufacture and were rectified by expenditure of additional works overhead
charged to the extent of 20% on proportionate direct wages. The total gross
output of castings during the year: 2,000 tons. Find out the manufacturing cost
of the saleable castings per ton.
Cost Sheet or
Statement of Cost
|
Particulars |
Amount |
|
Materials Used: Opening
Stock
14,000 Purchases 1,00,000
1,14,000 Less: Closing
Stock 10,000 Direct Wages |
1,04,000 20,000 |
|
Prime Cost Work overhead:
50% of direct wages Stores
overhead: 10% of material cost |
1,24,000 10,000 10,400 |
|
Less: Sale of
scrap: 200 tons (i.e. 10% of gross output) |
1,44,000 800 |
|
Add: Cost of
rectification of defective works: 180 tons (i.e. 10% of net output) @ Rs. 2 per ton
[Note – 1] |
1,43,600 360 |
|
Manufacturing
cost of 1,800 tons saleable castings |
1,43,960 |
|
Cost per ton
(approx) |
80.00 |
Working
Note: Cost of rectification of defective works per ton:
Direct Wages per
ton = (20,000/2,000 = 10)
Rectification
cost: 20% of Rs. 10 = Rs. 2
20.
From the following particulars prepare a Cost Sheet showing the total cost per
tone for the period ended 31st Dec, 2012.
|
Particulars |
Rs. |
Particulars |
Rs. |
|
Raw materials Productive
wages Unproductive
wages Factory rent
and taxes Factory
lighting Factory heating Motive power Haulage (works) Director’s fees
(works) Director’s fees
(office) Factory
cleaning Sundry office
expenses Estimating
expenses (works) Factory
stationery Office
stationery Loose tools
written off |
33,000 38,000 10,500 7,500 2,200 1,500 4,400 3,000 1,000 2,000 500 200 800 750 900 600 |
Rent and taxes
(office) Water supply
(works) Factory
Insurance Office
Insurance Legal expenses Rent of
warehouse Depreciation of - Plant
and Machinery - Office
Building - Delivery
vans Bad debts Advertising Sales department’s
salaries Upkeep of
delivery vans Bank charges Commission on
sales |
500 1,200 1,100 500 400 300 |
The total output
for the period has been 14,775 tones.
Cost Sheet or
Statement of Cost
|
Particulars |
Amount |
Amount |
|
Raw Materials Add: Productive
Wages |
33,000 38,000 |
|
|
(a) Prime Cost Add: Factory
Overhead: Unproductive
wages Factory rent
and taxes Factory
lighting Factory heating Motive power Haulage (works) Director’s Fees
(works) Factory
cleaning Estimating
expenses (works) Factory
stationery Water supply
(works) Factory
insurance Depreciation of
Plant & Machinery Loose Tools
written off |
10,500 7,500 2,200 1,500 4,400 3,000 1,000 500 800 750 1,200 1,100 2,000 600 |
71,000 37,050 |
|
(b) Factory
Cost Add: Office and
administrative overhead: Director’s fees
(Office) Sundry office
expenses Office
stationery Office
Insurance Legal expenses Depreciation on
office Building Rent and Taxes
(office) Bank charges |
2,000 200 900 500 400 1,000 500 50 |
1,08,050 5,550 |
|
(c) Cost of
production Add: Selling
& Distribution overhead: Rent of
warehouse Depreciation on
Delivery vans Bad debts Advertising Sales
department’s salaries Un of delivery
vans Commission of
sales |
300 200 100 300 1,500 700 1,500 |
1,13,600 4,600 |
|
Total Cost |
1,18,200 |
Cost per ton =
1,18,200/14,775 = Rs. 8 per ton
21.
The accounts of Z Manufacturing Company for the year ended December, 2012 show
the following:
|
Particulars |
Amount |
Particulars |
Amount |
|
Factory Office
Salaries General Office
Salaries Carriage
Outward Carriage on
Purchases Bad Debts
written off Repair of
Plant, Machinery and Tools Rent, Rates,
Taxes & Insurance - Factory - Office Sales Stock of
Materials - 31st Dec,
2011 - 31st Dec,
2012 Materials
Purchased |
6,500 12,600 4,300 7,150 6,500 4,450 8,500 2,000 4,61,100 62,800 48,000 1,85,000 |
Travelling
Expenses Traveler’s
Salaries & Commission Productive
Wages Depreciation –
Plant, Machinery and Tools Depreciation –
Furniture Director’s fees Gas and Water –
Factory - Office Manager’s
Salary (3/4 Factory
and 1/4 Office) General
Expenses Income Tax Dividend |
2,100 7,700 1,26,000 6,500 300 6,000 1,200 400 10,000 3,400 500 1,000 |
Prepare statement
giving the following information: Materials Consumed; Prime Cost; Factory
Cost; Cost of Production; Total cost; Net Profit.
In the Books of Z
Manufacturing Company
Cost Sheet
|
Particulars |
Amount |
Amount |
|
Raw Material
Consumed: Opening Stock Purchases Carriage on
purchases Less: Closing
Stock of Raw Materials |
62,800 1,85,000 7,150 48,000 |
|
|
(a) Raw
Materials consumed during the year Productive
wages |
2,06,950 1,26,000 |
|
|
(b) Prime Cost Works
overheads: Factory Office
salaries Repairs of
plant, machinery & tools Rent, rates,
taxes & insurance Depreciation on
plant, machinery and tools Gas and water Manager’s salary |
6,500 4,450 8,500 6,500 1,200 7,500 |
3,32,950 34,650 |
|
(c) Factory
Cost Administrative
Overheads: General Office
salaries Rent, rates,
taxes & insurance Depreciation on
furniture Director’s fees Manager’s
salary General
expenses Gas and water |
12,600 2,000 300 6,000 2,500 3,400 400 |
3,67,600 27,200 |
|
(d) Cost of
production Selling &
distributive Overheads: Carriage
outward Bad debts
written off Travelling
expenses Traveler’s
salaries & commission |
4,300 6,500 2,100 7,700 |
3,94,800 20,600 |
|
(e) Total Cost Net Profit |
4,15,400 45,700 |
|
|
(f) Sales |
4,61,100 |
22.
Following data have been extracted from the books of Sunshine Industries Ltd.
for the year 2012:
|
Particulars |
Amount |
Particulars |
Amount |
|
Opening Stock
of Raw Material Purchase of Raw
Material Closing Stock
of Raw Material Carriage Inward Wages – Direct Wages –
Indirect Rent and Rates
– Factory - Office Depreciation - Plant
and Machinery - Office
Furniture Cash Discount |
25,000 85,000 40,000 5,000 90,000 10,000 5,000 500 1,500 100 5,000 |
Indirect
Consumption of Material Salary – Office - Salesmen Other Factory
Expenses Other Office
Expenses Manager’s
Remuneration Bad Debts
written off Advertisement
Expenses Travelling
Expenses of Salesmen Carriage and
Freight Outward Sales Advance Income-tax
paid |
500 2,500 2,000 5,700 900 12,000 1,000 2,000 1,100 1,000 2,50,000 15,000 |
The manager has
the overall charge of the company and his remuneration is to be allocated as
Rs. 4,000 to the factory, Rs. 2,000 to the office and Rs. 6,000 to the selling
operations.
From the above
particulars prepare a statement showing (a) Prime Cost; (b) Factory Cost; (c)
Cost of production; (d) Cost of sales; and (e) Net profit.
Cost Sheet of sunshine Industries Ltd.
For the year 2012
|
Particulars |
Amount |
Amount |
|
Opening Stock
of Raw Material Add: Purchases Add: Carriage
inward Less: Closing
Stock of Raw Materials |
25,000 85,000 5,000 40,000 |
|
|
(a) Raw
Material Consumed during the year Add: Direct
wages |
75,000 90,000 |
|
|
(b) Prime Cost Add: Factory
Overheads: Wages (Indirect) Rent &
Rates Depreciation on
Plant & Machinery Indirect
consumption of Material Other Factory
expenses Manager’s
Remuneration |
10,000 5,000 1,500 500 5,700 4,000 |
1,65,000 26,700 |
|
(c) Work’s Cost Add: Office and
Administrative Overhead: Rent &
Rates Depreciation on
office furniture Salary Other office
expenses Manager’s
Remuneration |
500 100 2,500 900 2,000 |
1,91,700 6,000 |
|
(d) Cost of
Production Add; Selling
& distributive overhead: Salary of
salesmen Manager’s
Remuneration Advertisement
expenses Travelling
expenses of salesmen Carriage and
Freight outward Bad debts
written off |
2,000 6,000 2,000 1,100 1,000 1,000 |
1,97,700 13,100 |
|
(e) Cost of
sales (f) Profit
(Balancing figure) |
2,10,800 39,200 |
|
|
Sales |
2,50,000 |
23.
A manufacturing concern requires a statement showing the result of its
production operation for September, 2012. Cost records give the following
information.
|
Particulars |
1st Sep. 2012 (Rs.) |
30th Sep. 2012 (Rs.) |
|
Raw Material Finished Goods Work-in-Progress |
1,00,000 71,500 31,000 |
1,23,500 42,000 34,500 |
Transactions
during the month of September 2012:
|
Particulars |
Amount |
Particulars |
Amount |
|
Purchase of Raw
Materials Direct Wages Works Expenses Administration
Expenses |
88,000 70,000 39,500 13,000 |
Sale of Factory
Scrap Selling and
Distribution Expenses Sales |
2,000 15,000 2,84,000 |
Cost Sheet
For the month of
September, 2012
|
Particulars |
Amount |
|
Raw Materials
(Opening) Add: purchase
of Raw Materials Less: Raw
Materials (closing) |
1,00,000 88,000 1,23,500 |
|
Raw Materials
consumed Add: Direct
wages |
64,500 70,000 |
|
Prime Cost Add: Work’s
overheads: Less: Sale of
Factory scrap |
1,34,500 39,500 2,000 |
|
Work’s Cost
incurred Add:
Work-in-progress (Opening) Les:
work-in-progress (Closing) |
1,72,000 31,000 34,500 |
|
Work’s Cost Add: Office and
administrative Overhead |
1,68,500 13,000 |
|
Cost of
Production Add: Finished
goods (Opening) |
1,81,500 71,500 |
|
Less: Finished
goods (Closing) |
2,53,000 42,000 |
|
Cost of goods
sold Add: Selling
and Distributive overhead: Cost of goods
sold Profit
(Balancing figure) |
2,11,000 15,000 2,26,000 58,000 |
|
Sales |
2,84,000 |
24.
The Modern Manufacturing Company submits the following information on 31st March,
2012:
|
Particulars |
Amount (Rs.) |
Amount (Rs.) |
|
Sales for the
year Inventories at
the beginning of the year: - Finished
goods - Work-in-Progress Purchase of
materials for the year Materials
Inventory: - At
the beginning of the year - At
the end of the year Direct Labour Factory
overhead @ 60% of the direct labour cost Inventories at
the end of the year: - Work-in-Progress - Finished
goods Other expenses
for the year: - Selling
expenses 10% of sales - Administrative
expenses 5% of sales |
7,000 4,000 3,000 4,000 6,000 8,000 |
2,75,000 1,10,000 65,000 |
Prepare a
statement of cost and profit.
In the Books of Modern
Manufacturing Company
Cost Sheet
|
Particulars |
Amount |
Amount |
|
Raw Material
Consumed: Opening Purchases Less: Closing
Stock of Raw Materials |
3,000 1,10,000 4,000 |
|
|
(a) Raw
Materials Consumed during the year Direct Labour |
1,09,000 65,000 |
|
|
(b) Prime Cost Works
Overheads: Factory
overhead (60% of direct labour cost) Add: Opening
stock of work-in-progress Less: Closing
stock of work-in-progress |
39,000 4,000 6,000 |
1,74,000 37,000 |
|
(c) Factory’s
Cost Administrative
Overheads: Administrative
expenses (5% of sales) |
2,11,000 13,750 |
|
|
(d) Cost of
Production Add: Opening
stock of finished goods Less: Closing
stock of finished goods |
2,24,750 7,000 8,000 |
|
|
(e) Cost of
goods sold Selling and
Distributive Overhead: Selling
Expenses (10% of sales) |
2,23,750 27,500 |
|
|
(f) Total cost Net Profit |
2,51,250 23,750 |
|
|
(g) Sales |
2,75,000 |
25. Following
information has been obtained from the records of a Manufacturing Company:
|
Particulars |
1-1-2012 (Rs.) |
31-12-2012 (Rs.) |
|||
|
Stock of Raw
Materials Stock of
Finished Goods Stock of
Work-in-Progress |
40,000 1,00,000 10,000 |
50,000 1,50,000 14,000 |
|||
|
Particulars |
Rs. |
Particulars |
Rs. |
||
|
Indirect Labour Lubricants Insurance on
plant Purchase of Raw
Materials Sales
Commission Salaries of
Salesmen Carriage
Outward |
50,000 10,000 3,000 4,00,000 60,000 1,00,000 20,000 |
Administration
Expenses Power Direct Labour Depreciation on
Machinery Factory Rent Property Tax on
Factory Building Sales |
1,00,000 30,000 3,00,000 50,000 60,000 11,000 12,00,000 |
||
Prepare a
Statement of Cost and Profit showing (a) Cost of Raw Materials Consumed; (b)
Prime Cost; (c) Total Manufacturing Cost; (d) Factory Manufacturing Cost; (e)
Cost of Production; (f) Cost of Goods Sold; (g) Cost of sales; (h) Profit;
In the Books of
Manufacturing Company
Cost Sheet
|
Particulars |
Amount |
Amount |
|
Raw Material
Consumed: Opening Stock Purchases Less: Closing
Stock of Raw Materials |
40,000 4,00,000 50,000 |
|
|
(a) Raw
Material consumed during the year Direct Labour |
3,90,000 3,00,000 |
|
|
(b) Prime Cost Works
Overheads: Indirect Labour Lubricants Insurance on
Plant Power Depreciation on
Machinery Factory Rent Property for
factory Building |
50,000 10,000 3,000 30,000 50,000 60,000 11,000 |
6,90,000 2,14,000 |
|
(c) Factory
cost incurred Add: Opening
Stock of work-in-progress Less: Closing
Stock of work-in-progress |
9,04,000 10,000 14,000 |
|
|
(d) Factory
Cost Administrative
Overheads: Administrative
Expenses |
9,00,000 1,00,000 |
|
|
(e) Cost of
Production Add: Opening
Stock of finished goods Less: Closing
Stock of finished goods |
10,00,000 1,00,000 1,50,000 |
|
|
(f) Cost of
goods sold Selling and
Distributive Overhead: Sale Commission Salaries of
Salesman Carriage
outward |
60,000 1,00,000 20,000 |
9,50,000 1,80,000 |
|
(g) Total Cost Net Profit |
11,30,000 70,000 |
|
|
(h) Sales |
12,00,000 |
26.
Following information has been obtained from the records of a manufacturing
concern:
|
1-1-2012 (Rs.) |
31-12-2012 (Rs.) |
||||
|
Stock of Raw
Materials Work-in-Progress Stock of
Finished Goods |
30,000 15,000 43,700 |
35,000 20,000 54,000 |
|||
|
Particulars |
Rs. |
Particulars |
Rs. |
||
|
Indirect Wages Sales Factory Rent
& rates Office Salaries General Expenses Office Rent Rent of Show
Room |
9,720 3,25,000 7,830 15,030 13,500 2,000 1,200 |
Purchase of Raw
Materials Productive
Wages Plant Repair Depreciation on
Plant Factory
Lighting Salesmen’s
Salaries |
1,20,000 90,000 3,420 8,360 7,380 7,650 |
||
Prepare (i) Cost
Sheet showing cost of raw materials consumed, prime cost, factory cost incurred
and factory cost. (ii) Income statement in traditional form for the year
showing gross profit and net profit.
Statement Cost
Sheet
|
Particulars |
Amount |
Amount |
|
Raw Material
Consumed: Opening Stock Purchases Carriage inward |
30,000 1,20,000 |
|
|
Less: Closing
Stock of Raw Materials |
1,50,000 35,000 |
|
|
(a) Raw
Material consumed during the year Productive
wages |
1,15,000 90,000 |
|
|
(b) Prime Cost Factory
Overheads: Indirect wages Factory rent
& rates Plant repair Depreciation on
plant Factory
lighting |
9,720 7,830 3,420 8,360 7,380 |
2,05,000 36,710 |
|
(c) Factory
cost incurred Add: Opening
Stock of work-in-progress Less: Closing
Stock of work-in-progress |
2,41,710 15,000 20,000 |
|
|
(d) Factory
Cost |
2,36,710 |
Income Statement
For the year
ended on 31-12-2012
|
Particulars |
Amount |
|
Net Sales Less: Cost
of Goods Sold Opening stock
of finished
goods 43,700 Add: Factory
cost
2,36,710
2,80,410 Less: Closing
stock of finished goods 54,000 |
3,25,000 2,26,410 |
|
Gross Profit Less: Operating
Expenses Office and
Administrative overheads
30,530 (15,030+13,500+2,000) Selling and
Distribution overheads 8,850 (1,200+7,650)
|
98,590 39,380 |
|
Net Profit |
59,210 |
27.
From the following particulars, prepare a Cost Statement showing the components
of Total Cost and Profit for the year ended 31st
|
1-1-2012 (Rs.) |
31-12-2012 (Rs.) |
||||
|
Stock of
finished goods Stock of raw
materials Work-in-Progress |
6,000 40,000 15,000 |
15,000 50,000 10,000 |
|||
|
Particulars |
Rs. |
Particulars |
Rs. |
||
|
Purchase of raw
materials Carriage inward Wages Works Manger’s
Salary Factory
employees salaries Factory rent,
taxes and insurance Power expenses Other
production expenses General expenses |
4,75,000 12,500 1,75,000 30,000 60,000 7,250 9,500 43,000 32,500 |
Sales for the
year Income-tax Dividend Debenture
interest Transfer to
Sinking Fund for replacement
of machinery Goodwill
written off Payment of
sales tax Selling
expenses |
8,60,000 500 1,000 5,000 10,000 10,000 16,000 9,250 |
||
Statement Cost
Sheet
|
Particulars |
Amount |
Amount |
|
Raw Material
Consumed: Opening Stock Purchases Carriage inward Less: Closing
Stock of raw material |
40,000 4,75,000 12,500 50,000 |
|
|
(a) Raw
Material Consumed during the year Wages |
4,77,500 1,75,000 |
|
|
(b) Prime Cost Factory
Overhead: Work’s
manager’s salary Factory
employee’s salary Factory rent,
taxes, insurance Power expenses Other
production expenses |
30,000 60,000 7,250 9,500 43,000 |
6,52,500 1,49,750 |
|
(c) Factory
cost incurred Add: Opening
stock of work-in-progress Less: Closing
Stock of work-in-progress |
8,02,250 15,000 10,000 |
|
|
(d) Factory
Cost Administrative
Overhead: General
Expenses |
8,07,250 32,500 |
|
|
(e) Cost of
Production Add: Opening
stock of finished goods Less: Closing
stock of finished goods |
8,39,750 6,000 15,000 |
|
|
(f) Cost of
goods Sold Selling and
Distribution Overhead: Selling
Expenses |
8,30,750 9,250 |
|
|
(g) Total Cost Net Profit |
8,40,000 20,000 |
|
|
(h) Sales |
8,60,000 |
28.
From the following particulars of a manufacturing firm, prepare a statement
showing (a) Cost of materials used; (b) Works cost; (c) Cost of production; (d)
Percentage of works overhead to productive wages: (e) Percentage of general
overhead to works cost.
|
Particulars |
Rs. |
Particulars |
Rs. |
|
Stock of
materials on 1-1-2012 Purchase of
materials in January, 2012 Stock of
finished goods on 1-1-2012 Productive
wages |
40,000 11,00,000 50,000 5,00,000 |
Finished goods
sold Works overhead Office and
general expenses Stock of
materials on 31-1-2012 Stock of finished
goods on 31-1-2012 |
24,00,000 1,50,000 1,00,000 1,40,000 60,000 |
In the books of a
Manufacturing firm
Cost Sheet
|
Particulars |
Amount |
Amount |
|
Opening Stock
of Raw Materials Add: Purchases
of Raw Materials |
40,000 11,00,000 |
|
|
Less: Closing
Stock of Raw Materials |
11,40,000 1,40,000 |
|
|
(a) Raw
Materials Consumed during the year Add: Productive
Wages |
10,00,000 5,00,000 |
|
|
(b) Prime Cost Add: Factory
Overheads: Work’s Overhead |
15,00,000 1,50,000 |
|
|
(c)
works/Manufacturing/Factory Cost Add: Office and
Administrative Overheads |
16,50,000 1,00,000 |
|
|
(d) Cost of
production Add: Opening
Stock of finished goods Less: Closing
Stock of finished goods |
50,000 60,000 |
17,50,000 (10,000) |
|
(e) Cost of
goods sold /sales Add: Profit |
17,40,000 6,60,000 |
|
|
Sales |
24,00,000 |
Working Note:
% of works
overheads to Productive Wages = (1,50,000/5,00,000 * 100) = 30%
% of General
overheads to Works Cost = (1,00,000/16,50,000*100) = 6.06%
29.
Mr. Gopal furnishes the following data relating to the manufacture of a
standard product during the month of April, 2012:
|
Raw materials
consumed Direct labour
charges Machine hours
worked Machine hour
rate Administrative
overheads Selling
overheads Units produced Units sold |
Rs. 15,000 Rs. 9,000 Rs. 900 Rs. 5 20% on works cost Rs. 0.50 per unit 17,100 16,000 at Rs. 4 per unit |
You are required
to prepare a Cost Sheet from the above showing: (a) the cost of production per
unit; (b) profit per unit sold and profit for the period.
Statement of Cost
Sheet or Cost Sheet
|
Particulars |
Amount |
Amount |
|
Raw Material
Consumed Wages |
15,000 9,000 |
|
|
(a) Prime Cost Factory
Overheads (900 x 5) |
24,000 4,500 |
|
|
(b) Work’s cost Administrative
Overheads (28,500 x 20%) |
28,500 5,700 |
|
|
(c) Cost of
Production Less: Closing
Stock of finished goods (34,200/17,100
= 2*1,100) |
17,100 1,100 |
34,200 2,200 |
|
(d) Cost of
goods sold Selling &
Distribution Overheads (16,000*0.5) |
16,000 |
32,000 8,000 |
|
(e) Total Cost Net Sales |
16,000 |
40,000 24,000 |
|
Sales |
16,000 |
64,000 |
Working
Note:
Cost of
production per unit = (34,200/17,100 = 2)
Profit per unit =
(24,000/16,000 = 1.50)
30.
Prepare the Cost Sheet to show the total cost of production and cost per unit
of goods manufactured by a company for the month of July, 2012. Also find the
cost of sales and profit.
|
Rs. |
Rs. |
||
|
Stock of Raw
Materials 1-7-2012 Raw Materials purchased Stock of Raw
Material 31-7-2012 Manufacturing
Wages Depreciation on
Plant Loss on sale of
a part of Plant |
3,000 28,000 4,500 7,000 1,500 300 |
Factory Rent
and Rates Office Rent General
Expenses Discount on
Sales Advertisement
Expenses to be charged
fully Income-tax paid Sales |
3,000 500 400 300 600 2,000 50,000 |
The number of
units produced during July, 2012 was 3,000. The stock of finished goods was 200
and 400 units on 1-7-2012 and 31-7-2012 respectively. The total cost of the
units on hand on 1-7-2012 was Rs. 2,800. All these had been sold during the
month.
Statement of Cost
or Cost Sheet
|
Particulars |
Amount |
Amount |
|
Raw Materials
Consumed: Opening Stock Purchases Less: Closing
Stock of Raw Material |
3,000 28,000 4,500 |
|
|
(a) Raw
Material consumed during the year Manufacturing
wages |
26,500 7,000 |
|
|
(b) Prime Cost Work’s
Overheads: Factory rent
& rates Depreciation on
plant |
33,500 3,000 1,500 |
|
|
(c) Work’s Cost Administrative
Overheads: Office rent General
Expenses |
38,000 500 400 |
|
|
(d) Cost of
production Add: Opening
stock of finished goods Less: Closing
Stock of finished goods (38,900/3,000 = 12.97 * 400) |
3,000 200 400 |
38,900 2,800 5,187 |
|
(e) Cost of
goods sold Selling &
Distributive Overheads: Advertisement
Expenses |
2,800 - |
36,513 600 |
|
(f) Total Cost Add: Net Profit |
2,800 - |
37,113 12,887 |
|
Sales |
2,800 |
50,000 |
Working
Note: Total cost per ton = (Total Cost / Output during the year)
31.
In a factory two types of radios are manufactured, viz, Orient and Sujon
Models. From the following particulars prepare a statement showing cost and
profit per radio sold. There is no opening or closing stock.
|
Particulars |
Orient (Rs.) |
Sujon (Rs.) |
|
Materials Labour |
27,300 15,600 |
1,08,680 62,920 |
Works overhead is
charged at 80% on labour and office overhead is taken at 15% on works cost. The
selling price of both radios is Rs. 1,000. 78 Orient radios and 286 Sujon
radios were sold.
Statement of cost
or Cost Sheet
|
Particulars |
Orient (78) |
Sujon (287) |
||
|
Unit |
Total |
Unit |
Total |
|
|
Material Wages |
350 200 |
27,300 15,600 |
1,08,680 62,920 |
|
|
(a) Prime Cost Add: Factory
Overheads (80% on labour) |
550 160 |
42,900 12,480 |
50,336 |
|
|
(b) Work’s Cost Add: Office
& Administrative Overhead |
710 106.50 |
55,380 8,307 |
||
|
(c) Cost of
production Profit |
816.5 183.50 |
63,687 14,313 |
||
|
(d) Sales |
1,000 |
78,000 |
||
32.
Your company is an export-oriented organization manufacturing
Internal-communication equipment of a standard size. The company is to send
quotations to foreign buyers of your product. As the Cost Accounts Chief; you
are required to help the management in the matter of submission of the
quotation by the preparation of a cost estimate based on the following figures
relating to the year 2012. Total Output (in units) 20,000
|
Expenses Incurred |
Rs. |
Expenses Incurred |
Rs. |
|
Local Raw
Materials Consumed Imports of Raw
Materials (actual
consumption) Direct Labour
in Works Indirect Labour
in Works Storage of Raw
Materials and spares Fuel Tools Consumed Depreciation on
Plant Salaries of
works Personnel |
10,00,000 1,00,000 10,00,000 2,00,000 50,000 1,50,000 20,000 1,00,000 1,00,000 |
Excise Duty on
Production Administrative
Office Expenses Salary of the
Managing Director Salary of the
Joint Managing
Director Fees of
Directors Expenses on
Advertising Selling
Expenses Sales Depots Packaging and
Distribution |
2,00,000 2,00,000 60,000 40,000 20,000 1,60,000 1,80,000 1,20,000 1,20,000 |
Prepare a
statement of Cost.
Cost Sheet
For the year 2012
|
Particulars |
Amount |
Amount |
|
Raw Materials
Consumed during the year Add: Direct
Wages |
12,00,000 10,00,000 |
|
|
Prime Cost Add: Factory
Overheads: Indirect Labour
in works Storage of raw
materials and spares Fuel Tools consumed Depreciation on
Plant Salaries of
works personnel Excise duty on
production |
2,00,000 50,000 1,50,000 20,000 1,00,000 1,00,000 2,00,000 |
8,20,000 |
|
Factory
Cost/Work’s Cost Add: Office and
Administrative Overhead: Administrative
office expenses Salary of
Managing Director Fees of
directors Salary of joint
Managing Director |
2,00,000 60,000 20,000 40,000 |
30,20,000 3,20,000 |
|
Cost of
Production Add: Selling
and Distributive Overheads: Expenses on advertising Selling
Expenses Sales depots Packaging and
distribution |
1,60,000 1,80,000 1,20,000 1,20,000 |
33,40,000 5,80,000 |
|
Cost of sales Add: Profit
margin (20% on sales or 25% on cost) |
39,20,000 9,80,000 |
|
|
Sales |
49,00,000 |
Working Note:
Selling Price per
unit before subsidy by government = (49,00,000/20,000) = Rs. 245
Selling price per
unit after subsidy by government = Rs. 245 – Rs. 100 = Rs. 145
IMPORTANT NOTE:
Selling price to be estimated, we have to convert profit margin from sales to
cost.
33.
The Government of India has instituted the dual pricing system in the industry
in which your organization operates. You are the head of the Costing Division
of Raja Textiles Co. Ltd. Your company produces a standard type of cloth, 50%
of which is procured by the Government at a price of Rs. 4 per metre. You are
required by the Managing Director of your company to suggest a suitable price
for the cloth to be sold in the open market. Production during 2011-12 has been
20,00,000 metres of cloth. Relevant information is given below:
|
Expenditure Head |
Amount (Rs.) |
Expenditure Head |
Amount (Rs.) |
|
Cotton Consumed Direct Labour
in Factory Carriage Inward Indirect Labour
in Factory Salary of Works
Director and other Staff
in Factory Water, power,
Local Taxes (Factory) Dyeing,
Bleaching, etc. Depreciation
(Factory) Excise and
other Taxes on Production Misc. Expenses
(Factory) Office Salaries Salary of
Managing Director |
10,00,000 10,00,000 50,000 4,00,000 2,50,000 5,00,000 10,00,000 2,00,000 30,00,000 1,00,000 10,00,000 1,00,000 |
Expenditure on
Sales Depot Depreciation of
Machines (Office) Misc. Office
Expenditure Purchase of
Computer for Office Misc. Purchases
of Furniture and
Machines for Office Dividends paid Director’s Fees Advertising and
Publicity Commission paid
on Sales Commission paid
to Foreign Buyer Packing and
Forwarding (on sales) |
4,00,000 1,00,000 1,00,000 2,00,000 5,00,000 12,00,000 2,00,000 10,00,000 10,00,000 1,00,000 2,00,000 |
Following further
information is made available: (i) The company expects a fair return of 20% on
its paid-up capital which is Rs. 1,00,00,000, (ii) Marketing Expenses
outstanding are Rs. 1,00,000. Suggest the open market price after preparing a
Cost Analysis Sheet in columnar form.
Cost Sheet of
Raja Textiles Co. Ltd.
For the year
ended on 2011 – 12
|
Particulars |
Amount |
Amount |
|
Cotton Consumed Add: Carriage
Inward |
10,00,000 50,000 |
10,50,000 |
|
(a) Raw
Material Consumed during the year Add: Direct
Wages |
10,50,000 10,00,000 |
|
|
Prime Cost Add: Factory
Overheads: Indirect labour Salary of work
director and staff in factory Water, power
and local taxes Dyeing,
Bleaching Depreciation Excise and
other taxes Misc. Expenses |
4,00,000 2,50,000 5,00,000 10,00,000 2,00,000 30,00,000 1,00,000 |
20,50,000 54,50,000 |
|
Work’s Cost Add: Office and
Administrative Overheads: Salary of
Managing Director Depreciation of
Machines (Office) Misc. Office
expenses Director Fees Office salaries |
1,00,000 1,00,000 1,00,000 2,00,000 10,00,000 |
75,00,000 15,00,000 |
|
Cost of
production Add: Selling
& Distributive Overheads: Advertising and
Publicity Commission paid
on sales Commission paid
to foreign buyers Packaging and
forwarding Expenditure of
sales depot Marketing
expenses out |
10,00,000 10,00,000 1,00,000 2,00,000 4,00,000 1,00,000 |
90,00,000 28,00,000 |
|
Cost of Sales Add: Profit
margin (20% on paid up
capital which is Rs. 1,00,00,000) |
1,18,00,000 20,00,000 |
|
|
Expected Sales Less: Sales to
government (10, 00, 000 mtrs) |
10,00,000 |
1,38,00,000 40,00,000 |
|
Expected sales
in open market (10, 00, 000 mtrs) |
98,00,000 |
Working Note :
Estimated selling price per unit for the open market = (expected sales in open
market/ no. of units to be sold in open market) = 98,00,000/10,00,000
34.
The cost of sale of product A is made up as follows:
|
Particulars |
(Rs.) |
Particulars |
(Rs.) |
|
Materials used
in manufacturing Materials used
in primary packing Materials used
in selling the product Materials used
in the factory Materials used
in the office Labour required
in producing Labour required
for factory supervision Indirect
Expenses – Factory |
60,000 10,000 1,500 750 1,250 10,000 2,000 1,000 |
Administration
Expenses Depreciation on
Office Building
and Equipment Depreciation on
Factory Building Selling
Expenses Freight on
materials purchased Advertising |
1,250 750 1,750 3,500 5,000 1,250 |
Assuming that all
the products manufactured are sold, what should be the selling price to obtain
a profit of 20% on selling price?
Cost Sheet of
Product A
|
Particulars |
Amount |
Amount |
|
Materials used
in manufacturing Primary packing
material Freight on
materials purchased |
60,000 10,000 5,000 |
75,000 |
|
(a) Raw
Material Consumed during the year Add: Direct
Labour |
75,000 10,000 |
|
|
(b) Prime Cost Add: Factory
Overheads: Material used
in the factory Labour required
to factory supervision Indirect
Expenses Depreciation on
Factory Building |
750 2,000 1,000 1,750 |
85,000 5,500 |
|
(c) Work’s Cost Add: Office and
administrative Overheads: Materials Administrative
Expenses Depreciation on
office Building |
1,250 1,250 750 |
90,500 3,220 |
|
(d) Cost of
Production Add: Selling and
Distributive Overheads: Selling
expenses Material used
in selling price Advertisement |
3,500 1,500 1,250 |
93,750 6,250 |
|
(e) Total Cost Add: Profit @
20% on selling price [Note – 1] |
1,00,000 25,000 |
|
|
Sales |
1,25,000 |
Working Note:
Since profit is 20% sales, therefore required profit is = 1,00,000 * 20/80 =
25,000
35.
Vindhyachal Industries manufacture a Product X. On 1st January,
2012, there were 500 units of finished product in stock. Other stocks on 1st January
2012, were as under:
|
Particulars |
Rs. |
|
Work-in-Progress Raw Materials |
5,740 11,620 |
The information
available form cost records for the year ended 31st December,
2012 was as follows:
|
Particulars |
(Rs.) |
Particulars |
(Rs.) |
|
Indirect Labour Direct Labour Freight on Raw
Material Purchased Stock of Raw
Materials on 31-12-2012 Other Factory
Expenses |
12,160 32,640 5,570 9,640 31,730 |
Work-in-Progress
on 31-12-2012 Sales – 15,000
units Indirect
Materials Total
Manufacturing Cost Incurred |
7,820 3,60,000 21,390 1,94,080 |
There are 1,500
units of product in finished goods stock on 31st December,
2012. You are required to: (i) Prepare a statement of cost for 2012 giving all
details of cost and their break up, and (ii) Determine the unit cost at which
finished goods stock is to be properly valued at the beginning and at the end
of 2012 (assuming the same cost used for both.)
Cost Sheet of
Vindhyachal Industries
For the year
ended on 31st December, 2012
|
Particulars |
Unit |
Amount |
|
Opening of Raw
Material Add: Purchases
of Raw material [Note – 1] Freight on Raw
Material purchased |
11,620 88,610 5,570 |
|
|
Less: Closing
Stock of Raw Material |
1,05,800 9,640 |
|
|
(a) Raw
Material Consumed during the year Add: Direct
Labour |
96,160 32,640 |
|
|
(b) Prime Cost Add: Factory
Overheads: Indirect Labour Other Factory
Expenses Indirect
materials |
1,28,800 12,160 31,730 21,390 |
|
|
(c) Factory
cost incurred Add: Opening
Stock of work-in-progress Less: Closing
Stock of work-in-progress |
1,94,080 5,740 7,820 |
|
|
(d) Factory
Cost or Cost of Production Add: Opening
Stock of finished goods [12 x 500] Less: Closing
stock of finished goods [12 x 1,500] |
16,000 500 1,500 |
1,92,000 6,000 18,000 |
|
(e) Cost of
goods sold Add: Profit |
15,000 |
1,80,000 1,80,000 |
|
(f) Sales |
15,000 |
3,60,000 |
Working Note:
Note – 1:
Calculation of Purchases:
|
Particulars |
Amount |
|
Factory cost
incurred Less: Factory
Overheads: Indirect Labour Other Factory
Expenses Indirect
materials |
1,94,080 12,160 31,730 21,390 |
|
Less: Direct
Labour |
1,28,800 32,640 |
|
Less: Opening
Stock of Raw Materials Add: Closing
Stock of Raw Materials Less: Freight
on Raw Material Purchased |
96,160 11,620 9,640 5,510 |
|
Purchase of Raw
Materials |
88,610 |
36.
The books of Adarsh Manufacturing Company present the following data for the
month of April, 2012. Direct labour cost Rs. 17,500 being 175% of the works
overhead; cost of goods sold excluding administration expenses Rs. 56,000.
Inventory accounts showed the following opening and closing balances:
|
Particulars |
April 1 Rs. |
April 30 Rs. |
|
|
Raw materials Work-in-Progress Finished goods |
8,000 10,500 17,600 |
10,600 14,500 19,000 |
|
|
Particulars |
Rs. |
||
|
Selling
expenses General and administration
expenses Sales for the
month |
3,500 2,500 75,000 |
||
You are required
to: (i) Compute the value of materials purchased, (ii) Prepare a statement of
cost showing the various elements of cost and also the profit.
Cost Sheet of
Adarsh Manufacturing Company
For the month of
April, 2012
|
Particulars |
Amount |
|
Opening Stock
of Raw Materials Add: Purchases
[Note – 1] Less: Closing
Stock of Raw Materials |
8,000 36,500 10,600 |
|
(a) Raw
Materials during the year Add: Wages |
33,900 17,500 |
|
(b) Prime Cost Add: Factory
Overheads: |
51,400 10,000 |
|
(c) Work’s Cost
incurred Add: Opening
Stock of work-in-progress Less: Closing
Stock of work-in-progress |
61,400 10,500 14,500 |
|
(d) Work’s Cost Add: Office and
administrative Overheads: |
57,400 2,500 |
|
(e) Cost of
Production Add: Opening
Stock of finished goods Less: Closing
Stock of finished goods |
59,900 17,600 19,000 |
|
(f) Cost of
goods Sold Add: Selling
and Distributive Overheads: |
58,500 3,500 |
|
(g) Cost of
Sales (h) Profit |
62,000 13,000 |
|
Sales |
75,000 |
Working Notes:
Note – 1:
Calculation of Purchases of Raw Material
|
Particulars |
Amount |
|
Cost of goods
sold Less: Opening
Stock of finished goods Add: Closing
Stock of finished goods |
56,000 17,600 19,000 |
|
Less: Opening
Stock of work-in-progress Add: Closing
Stock of work-in-progress |
57,400 10,500 14,500 |
|
Less:
Works/Factory Overheads (17,500*100/175) |
61,400 10,000 |
|
Less: Direct
Labour |
51,400 17,500 |
|
Less: Opening
Stock of Raw Materials Add: Closing
Stock of Raw Materials |
32,900 8,000 10,600 |
|
Purchase of Raw
Materials |
36,500 |