Cost Sheet Problems and Solutions | (Part 4)

[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 3 of cost sheet problems and solutions for more.

You can also go through my comprehensive article on Cost Sheet Format.  

Cost Sheet Practical Problems and Solutions (Part 4)

Q.1. The Tripathi electrical ltd. Manufactures one product. A Summary of its activities for 2015 is as follows:

Particulars

Units

Amount

Sales

Raw Material (Opening)

Raw Material (Closing)

W – I – P (Opening)

W – I – P (Closing)

Finished Goods (Opening)

Finished Goods (Closing)

Material purchases

Direct Labour

Manufacturing overheads

Selling expenses

General and administrative expenses

80,000

 

 

 

 

16,000

24,000

8,00,000

40,000

32,000

55,000

72,000

64,000

…………..

1,52,000

1,45,000

1,08,000

50,000

40,000

Prepare a cost sheet showing total cost and profit made during the year.  Also show value of closing stock on the basis of LIFO and FIFO.

Cost Sheet of Tripathi Electrical Ltd.

PARTICULARS

AMOUNT

UNIT

Raw Material (Opening)

Add: Material purchases

Less: Raw Material (Closing)

40,000

1,52,000

32,000

(a) Raw Material consumed during the year

Add: Direct Labour

Add: Factory overheads

1,60,000

1,45,000

1,08,000

(b) Work’s cost incurred

Add: W-I-P (Opening)

Less: W-I-P (Closing)

2,68,000

55,000

72,000

(c) Work’s cost

Add: Administrative Overheads

2,51,000

40,000

(d) Cost of production

Add: Finished goods (Opening)

Less: Finished goods (Closing)

2,91,000

64,000

79,364

88,000

16,000

24,000

(e) Cost of goods sold

Add: Selling and distributive overheads

2,75,631

50,000

80,000

(f) Total Cost

(g) Profit (Balancing figure)

3,25,631

4,74,369

80,000

Sales

8,00,000

80,000

Q. 2. Following are the figures extracted from the books of an iron foundry after the close of the year: (Dibrugarh University – 2004)

Particulars

Amount

Raw Materials:

Opening Stock

Purchases of Raw materials

Closing stock of raw materials

Direct wages

Works overheads

Stores overheads on materials

 

14,000

1,00,000

10,000

20,000

50% of direct wages

10% on the cost of material

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 casting were found to be defective in manufacture and were rectified by expenditure of additional works overheads charged to the extent of 20 % on the proportionate direct wages. The total gross output of castings during the year: 2000 tons. Find out the manufacturing cost of the saleable casting per ton.                               

Cost Sheet of an Iron foundry Ltd.

PARTICULARS

AMOUNT

UNIT

Materials used:

Opening Stock

Purchase

Less: Closing Stock

 

14,000

1,00,000

10,000

 

 

 

1,04,000

Add: Direct wages

          Prime Cost

          Work overhead: 50% of direct wages

          Stores overhead: 10% of material cost

20,000

1,24,000

10,000

10,400

 

Less: Sale of scrap: 200 tons (i.e. 10% of gross output)

1,44,400

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

1. Working Note: Cost of rectification of defective works per ton:

Direct wages per ton = 20,000/2,000 = Rs. 10 per ton

Rectification cost: 20% of Rs. 10 = Rs. 2.

Q.3. From the following information, prepare a cost sheet showing the cost and profit:  (Dibrugarh University – 2010)

Particulars

Rs

Opening raw material

29,500

Closing raw material

36,000

Opening work-in-progress :

     Material

     Wages

     Works overhead

 

13,600

11,000

6,600

Closing work-in-progress :

     Material

     Wages

     Works overhead

 

12,000

16,500

9,900

Opening finished goods – 200 units @ Rs 84

Closing finished goods – 1600 units

Purchase of raw material

1,90,000

Carriage on purchase

1,500

Sale of scrap of raw material

5,000

Wages

2,97,000

Works overhead @ 60% of direct labour cost

Administration overhead @ Rs 12 per unit produced

Selling and distribution overhead @ 20% of selling price

Sales – 7600 units at a profit of 10% on sales price.

Statement of Cost or Cost sheet

PARTICULARS

Units

Amount

Amount

Opening Stock of Raw material

Add: Purchase of Raw material

Add: Carriage inward

Less: Sale of scrap of raw material

Less: Closing Stock of Raw material

29,500

1,90,000

1,500

5,000

36,000

(a) Raw Material consumed during the year

Add: Direct wages

1,80,000

2,97,000

Prime Cost

Add: Works overhead @ 60% of direct labour cost

4,77,000

1,78,200

Work’s Cost incurred

Add: Opening stock of work-in-progress

Material               

Wages

Works overhead

Less: Closing stock of work-in-progress

Material

Wages

Works overhead

 

 

13,600

11,000

6,600

 

12,000

16,500

9,900

6,55,200

 

 

 

31,200

 

38,400

Work’s cost / factory cost

Add: Administration overhead @ Rs 12 per unit produced (9,000 * 12)

6,48,000

 

10,800

(b) Cost of Production

Add: Opening Stock of finished goods (@84)

Less: Closing Stock of finished goods(658800/9000= 73.2)

9,000

200

1,600

 

6,58,800

16,800

1,17,120

(c) Cost of goods Sold

Add: Selling and Distributive overheads

7,600

5,58,480

1,59,566

Total cost of sales

(d) Add: Profit for the year

7,600

7,18,046

79,783

Sales

7,600

7,97,829

Production = Sales + closing stock – opening stock = 7,600+1,600 – 200 = 9,000

Working note:

Let the sales be                                                                         x

Less: Profit @ 10% on Sales                                              0.10x

Cost of sales                                                                         0.90x

Less: Selling and distribution expenses (20% on x)       0.20x

Cost of goods sold                                                               0.70x

Now,

Selling and distribution overheads = (5,58,480*0.20x)/0.70x = 1,59,566

Profit for the year = (7,18,046*0.10x)/0.90x = 79,783

Q.4. Following extract of costing information relates to a commodity for the year ended 31st March, 2012: (Dibrugarh University – 2013)

Stock on 1st April, 2011: Raw materials

5000

Finished product (1000 tones)

4000

Stock on 31st March, 2012: Raw materials

5560

Finished product (2000 tons)

8000

Raw materials purchased

30000

Direct wages

25000

Rent, Rates and Taxes

1000

Carriage inwards

360

Work in progress on 1st April, 2011

1200

Work in progress on31st April, 2012

4000

Cost of factory supervision

2000

Sales of finished goods

75000

Advertisement and selling expenses amounts of 0.25 paise per ton sold. 16000 tones were produced during the year. Prepare a statement showing:

a)    The value of raw material used;

b)   The cost of production;

c)    The cost of turnover for the year;

d)   The net profit for the year and net profit per ton.

Statement of Cost or Cost sheet

PARTICULARS

Units

Amount

Opening Stock of Raw material

Add: Purchase of Raw material

Add: Carriage inward

Less: Closing Stock of Raw material

5,000

30,000

360

5,560

(a) Raw Material consumed during the year

Add: Direct wages

29,800

25,000

Prime Cost

Add: Work’s overheads:

Cost of factory supervision

54,800

 

2,000

Work’s Cost incurred

Add: Opening stock of work-in-progress

Less: Closing stock of work-in-progress

56,800

1,200

4,000

Work’s cost / factory cost

Add: Office and administrative overhead:

Rent, Rates and taxes

54,000

 

1,000

(b) Cost of Production

Add: Opening Stock of finished goods

Less: Closing Stock of finished goods

16,000

1,000

2,000

55,000

4,000

8,000

(c) Cost of goods Sold

Add: Selling and Distributive overheads (0.25*15,000)

15,000

51,000

3,750

Total cost of sales

(d) Add: Profit for the year

15,000

54,750

20,250

Sales

15,000

75,000

Profit per ton = 20250/15000 = 1.35

Q.5. Following details relate to ATEACO Ltd. for the year ending 31.03.2013: (Dibrugarh University – 2014)

01.04.2012

31.03.2013

Units

Rs.

Units

Rs.

Stock of Raw Materials

1000

12,000

800

10,000

Work-in-progress

800

16,000

1000

20,000

Stock of Finished Goods

6000

-

10000

-






Expenses during the year in Rs.

Direct Wages

6,00,000

Purchase of Raw Materials (97000 units)

11,14,000

Other Materials

36,000

Carriage Inward

5,640

Carriage Outward

3,000

Wages to Foremen

48,000

R & D Expenses

30,000

Other Wages

6,000

Manager’s Salary

72,000

Employee’s State Insurance

6,000

Power and Fuel

54,000

Office Expenses

36,000

Printing and Stationery

12,000

Counting House Salary

12,000

Sales of Scraps

1,640

Income Tax

22,000

Donation to Charity

5,000

Selling and Distribution expenses Rs. 1 per unit. Units manufactured during the year are 96000. Finished stock is valued at current cost. Prepare Cost Sheet showing the following:

a)    Materials consumed

b)   Prime cost

c)    Factory cost

d)   Cost of production

e)   Cost of goods sold

f)     Total cost of sales

Cost Sheet of ATEACO Ltd.

PARTICULARS

UNIT

AMOUNT

Opening Stock of Raw material

Add: Purchase of Raw material

Add: Carriage inward

Less: Closing Stock of Raw material

1,000

97,000

 

800

12,000

11,14,000

5,640

10,000

(a) Raw Material consumed during the year

Add: Direct wages

97,200

11,21,640

6,00,000

(b) Prime Cost

Add: Work’s overheads:

      Other material

      Wages to foremen

      Other wages

      Power and fuel

Less: Sale of Scraps

 

 

 

 

 

 

(1,000)

17,21,640

 

36,000

48,000

6,000

54,000

(1,640)

Work’s Cost incurred

Add: Opening stock of work-in-progress

Less: Closing stock of work-in-progress

 

800

1,000

18,64,000

16,000

20,000

(c) Work’s cost / factory cost

Add: Office and administrative overhead:

R & D Expenses

Manager’s salary

Employees State Insurance

Office expenses

Printing & stationery

Counting House Salary

18,60,000

 

30,000

72,000

6,000

36,000

12,000

12,000

(d) Cost of Production

Add: Opening Stock of finished goods (20,28,000/96,000*6,000)

Less: Closing Stock of finished goods (20,28,000/96,000*10,000)

96,000

6,000

10,000

20,28,000

1,26,750

2,11,250

(e) Cost of goods Sold

Add: Selling and Distributive overheads

92,000

-

19,43,500

96,000

(f) Total cost of sales

92,000

20,39,500

Q.6. Following details have been obtained from the costing records of a manufacturing company:

Particulars

Amount

Stock of Raw material (Opening)

Stock of Raw material (closing)                                                                                                                     

Material purchased

Office salaries (Drawings)

Count house salaries

Carriage inwards

Carriage outwards

Cash discount

Bad debt written off

Repairs to plant and machinery

Rent, rates, etc. (Factory)

Rent, rates, etc. (Office)

Travelling expenses

Travelling commission

Productive wages

Depreciation on Plant and machinery

Depreciation on office furniture

Director’s fees

Gas and water charges: Factory

Gas and water charges: Office

General charges

Manager’s Salary

47,000

50,000

2,08,000

9,600

14,000

8,200

5,100

3,400

4,700

10,600

3,000

1,600

3,100

8,400

1,40,000

7,100

600

6,000

1,500

300

5,000

12,000

Out of 48 working hours in a week, the time devoted by the manager in the factory and office was on average 40 hours and 8 hours respectively throughout the accounting year. Prepare a statement of cost 

Cost Sheet of a Manufacturing Company Ltd.

PARTICULARS

AMOUNT

AMOUNT

Stock of Raw material (Opening)

Add: Material Purchased

Add: Carriage Inward

Less: Stock of Raw material (Closing)

47,000

2,08,000

8,200

50,000

(a) Raw material consumed during the year

Add: Productive wages

2,13,200

1,40,000

(b) Prime cost

Add: Factory overheads:

Office salaries (Drawing)

Repairs to Plant and Machinery

Rent, rates etc. (factory)

Depreciation on Plant & Machinery

Gas and water charges: Factory

Manager’s salary (12,000*40/48)

 

 

9,600

10,600

3,000

7,100

1,500

10,000

3,53,500

 

 

 

 

 

 

41,800

(c) Work’s Cost

Add: Office and Administrative overheads:

Count house salaries

Rent, rates, (Office)

Depreciation on office furniture

Director’s fees

Gas and water charges: Office

General charges

Manager’s Salary  (12,000*8/48)

 

 

14,000

1,600

600

6,000

300

5,000

2,000

3,95,300

 

 

 

 

 

 

 

29,500

(d) Cost of production

Add: Selling and distributive overheads:

Carriage outward

Bad debt written off

Travelling expenses

Travelling commission

 

 

5,100

4,700

3,100

8,400

4,24,800

 

 

 

 

21,300

Total Cost

4,46,100

7. Production cost of VSK Ltd. a manufacturing company, for the year ending 31st March, 2011, are as follows:

Particulars

Rs.

Direct wages

Direct materials

Drawing office salaries and expenses

Salary of general manager

Advertising display material

Wages of dispatch department

Salaries and expenses of directors

Travelers’ salaries

Depreciation of delivery vans

Chargeable expenses

Office overhead (5% of works cost)

Sales office expenses

Salary of sales manager

Rent and rates of warehouses

Catalogues and price lists

Rent and Rates of showrooms

Production overheads (10% of prime cost)

60,000

1,00,000

2,000

16,000

8,000

11,000

22,000

13,000

7,000

4,000

 

9,000

14,000

3,000

6,000

5,000

Draw up a cost statement from the above bearing in mind that goods are sold at a profit of 20% on selling price.

Cost Sheet of VSR Ltd.

For the year ended on 31st March, 2011

PARTICULARS

AMOUNT

AMOUNT

Direct material

Add: Direct wages

Add: Chargeable expenses

1,00,000

60,000

4,000

(a) Prime Cost

Add: Factory Cost:

Production overhead (10% of Prime Cost)

Drawing Office salaries

 

 

16,400

2,000

1,64,000

 

 

18,400

(b) Work’s Cost

Add: Office & administrative overhead:

Office overheads (5% of Work’s Cost)

Salary of general manager

Salaries and expenses of directors

 

 

9,120

16,000

22,000

1,82,400

 

 

 

47,120

(c) Cost of Production

Add: Selling and distribution overhead:

Advertising display material

Traveler’s salaries

Seles office expenses

Salary of sales manager

Catalogues and price lists

Rent and rates of showroom

Wages of dispatch department

Depreciation of delivery van

Rent and Rates of warehouse

 

 

8,000

13,000

9,000

14,000

6,000

5,000

11,000

7,000

3,000

2,29,520

 

 

 

 

 

 

 

 

 

76,000

(d) Cost of sales

Profit

3,05,520

76,380

Sales

3,81,900

Working Note:  Sales price = 3,05,520*100/80 = 381900

8. A manufacturing company produces two commodities X and Y. Related data for the year 2010-11 are as follows:

Commodity

X (Rs.)

Y (Rs.)

Number of units produced

Direct expenses:

Raw material used

Wages

Other direct expenses

Other expenses:

Supervisor’s salary

Selling and distribution expenses

Administrative expenses

5,000

 

16,020

9,430

6,950

 

5,824

1,504

1,918

3,000

 

11,735

7,846

4,719

Prepare a cost sheet showing the cost of each commodity taking the following into consideration:

a)    Works overhead will be charged in the ratio of prime cost.

b)   Administrative expenses will be apportioned in the ratio that works cost of X bears to similar cost of Y.

c)    Selling and distribution expenses will be apportioned in production ratio.

Cost Sheet of two commodities

For the year ended on 2010-11

PARTICULARS

X (5,000)

Y (5,000)

Raw Material used

Add: Wages

Other Direct Expenses

16,020

9,430

6,950

11,735

7,846

4,719

Prime Cost

Add: Work Overhead:

Supervisor’s Salary [32,400:24,300]

32,400

 

3,328

24,300

 

8,32

Work’s Cost

Add: Office and administrative overhead:

35,728

1,096

25,132

822

Cost of production

Add: Selling and distribution overhead

36,824

940

27,618

564

Total Cost

37,764

28,182

9. From the following particulars of Jackson and Company Ltd. prepare a cost sheet for the month of December, 2010:

Particulars

Rs.

Stock on 1.12.10

     Raw materials

     Work-in-progress (valued at prime cost)

     Finished goods

Stock on 31.12.10

     Raw materials

     Work-in-progress (valued at prime cost)

     Finished goods

Purchased of raw materials

Chargeable expenses

Abnormal loss of materials

Insurance of raw materials

Remuneration of technical directors

Internal transport cost

Factory wages

Personnel department expenses

Depreciation of staff cars

Cost of free after-sales service

Insurance of finished stock

Warehouse wages

Sales

Professional fees

Market research expenses

Power and fuel

Works canteen and welfare expenses

Depreciation of delivery van

 

10,000

8,000

6,000

 

3,000

2,000

1,000

75,000

4,000

5,000

7,000

9,000

11,000

70,000

12,000

1,500

3,500

2,500

4,500

3,00,000

6,500

7,500

20,000

13,000

8,500

Cost Sheet

For The Month of December, 2010

PARTICULARS

AMOUNT

AMOUNT

Raw Material Consumed

Add: Opening Stock

Add: Purchases

Add: Insurance of raw materials

 

10,000

75,000

7,000

 

 

 

 

Less: Abnormal Loss

Less: Closing Stock

92,000

5,000

3,000

 

 

84,000

Add: Factory wages

Add: Chargeable expenses

70,000

4,000

 

Adjustment for work-in-progress:

Opening

Closing

 

 

8,000

(2,000)

1,58,000

 

 

6,000

Prime Cost

Add: Factory overheads:

Remuneration of technical directors

Internal transport

Power and Fuel

Works canteen and welfare expenses

 

 

9,000

11,000

20,000

13,000

1,64,000

 

 

 

 

53,000

Work Cost

Add: Office and administrative overheads:

Personnel department expenses

Depreciation of staff cars

Professional fees

 

 

12,000

1,500

6,500

2,17,000

 

 

 

20,000

Cost of production

Add: Opening Stock of finished goods

Less: Closing Stock of finished goods

2,37,000

6,000

1,000

Cost of goods sold

Add: Selling and distribution overhead:

Market research expenses

Cost of free after sales service

Insurance of finished goods

Warehouse wages

Depreciation of delivery van

 

 

7,500

3,500

2,500

4,500

8,500

2,42,000

 

 

 

 

 

26,500

Cost of sales

Profit (Balancing figure)

2,68,500

31,500

Sales

3,00,000

10. ARB Ltd. furnished the following information for the year 2010-11:

Particulars

Rs.

Stock of raw materials on 1.4.10

Stock of finished goods on 1.4.10 (500 tons)

Freight paid

Prime cost

Stock of raw materials on 31.3.11

Stock of finished goods on 31.3.11 (750 tons)

Direct Labour:

     60 skilled labourers @ Rs. 50 per day for 250 days

     200 unskilled labourers @ Rs. 30 per day for 250 days

Indirect wages

Factory rent, rates and power

Salary of managing director

Office rent and taxes

Donation

Advertisement

Income tax

Depreciation of plant and machinery

Selling overhead

Packing and distribution expenses

Fuel

1,00,000

8,00,000

2,00,000

44,50,000

3,00,000

?

 

 

 

40,000

30,000

50,000

1,00,000

30,000

4,50,000

60,000

35,000

5,00,000

85,990

65,000

Other information:

a)    During the year 2010-11 2,250 tons of finished goods were sold.

b)   The company valued the closing stock of finished goods under FIFO basis.

c)    The company maintains profit @20% on sales.

On the basis of abovementioned data, you are required to prepare a detailed cost sheet for the year 2010-11.

Cost Sheet of ABC Ltd

Period: Year ended 31-3-11

Output – 2,500 tons

PARTICULARS

TOTAL

PER TON

Raw Materials consumed:

Stock on 1-4-10

Purchases (see note 2)

Freight

 

1,00,000

22,00,000

2,00,000

 

Less: Stock on 31-3-11

25,00,000

3,00,000

 

Add: Direct Labour

Skilled: 60 x Rs. 50 x 250 days

Unskilled : 200 x Rs. 30 x 250 days

22,00,000

7,50,000

15,00,000

880.00

Prime cost

Add: Work overhead:

Indirect Labour                                                                                               40,000

Factory rent, rates, and power                                                                    30,000

Depreciation of Plant & Machinery                                                            35,000

Fuel                                                                                                                   65,000

44,50,000

 

 

 

 

1,70,000

1,780.00

 

 

 

 

68.00

Work’s cost

Add: Office and administrative overheads:

Salary of Managing Director                                                                         50,000

Office rent and taxes                                                                                  1,00,000

46,20,000

 

 

1,50,000

1,848.00

Cost of production (2,500)

Add: Stock of finished goods on 1-4-10

47,70,000

8,00,000

1,908.00

 

Less: Stock of finished goods on 31-3-11

55,70,000

14,31,000

Cost of goods sold (2,250 ton) (See Note – 3)

Add: Selling and distributive overhead:

Advertisement                                                                                             4,50,000

Selling overhead                                                                                          5,00,000

Packaging and distribution expenses                                                         85,990

41,39,000

 

 

 

10,35,990

1,839.56

 

 

 

460.44

Cost of sales

Profit (20% on sale i.e. 25% on cost)

51,74,990

12,93,748

2,300.00

575.00

Sales

64,68,730

2,875.00

Note 1: Production during the year:  (Sales 2,250 tons + closing stock 750 tons – opening stock 500 tons) = 2,500 tons

Note 2: Calculation of Purchases:

Prime Cost

Less: Direct Labour

Add: Closing Stock of Raw material

Less: Freight

Less: Opening Stock of Raw material

44,50,000

22,50,000

3,00,000

2,00,000

1,00,000

Purchases

22,00,000

Note 3: Per unit cost of goods sold Rs. 1,839.56 has been obtained by 44,39,000 by 2,250.

11. The accounts of the Steel ways Engineering Co. Ltd. show for 2010:

Rs.

Materials used

Manual and machine labour wages directly chargeable

Works overhead expenditure

Establishment and general expenses

1,80,000

1,60,000

40,000

19,000

a)    Show the works cost and total cost, the percentage that the works overhead cost bears to the manual and machine labour wages and the percentage that the establishment and general expenses bear to the works cost.

b)   What price should the company quote to manufacture a machine which, it is estimated will require an expenditure of Rs. 8,000 on materials and Rs. 6,000 on wages so that it will yield a profit of 25% on the total cost or 20% on selling price.

Cost Sheet or Statement of Cost

Of Steel Ways Ltd

PARTICULARS

AMOUNT

Material used

Manual and machine labour wages (Directly chargeable)

1,80,000

1,60,000

Prime Cost

Work’s overhead expenditure

3,40,000

40,000

Work’s Cost

Establishment & General Expenses

3,80,000

19,000

Total cost

3,99,000

 

Percentage of works overhead to manual and machine labour = (40,000/1,60,000*100)

Percentage of establishment and general expenses to work’s cost  = (19,000/3,80,000*100)

25%

5%

Statement of Estimated Cost for the Manufacture of the Machine Enquiry from………….

PARTICULARS

AMOUNT

Cost of Materials

Direct wages

8,000

6,000

Prime Cost

Works overhead (25% of wages)

14,000

1,500

Work’s Cost

Establishment and general expenses (5% of work’s cost)

15,500

775

Total Cost

Profit (20% on selling price or 25% on cost)

16,275

4,069

Price to be quoted

20,344

12. From the following particulars prepare a statement in such from as you consider most suitable for showing clearly all element of cost:

Particulars

Rs.

Particulars

Rs.

Opening stock of raw materials

Purchase of raw materials

Raw materials returned to suppliers

Closing stock of raw materials

Wages paid to:

     Productive workers

     Non-productive workers

Salaries paid to office staff

Carriage on raw materials purchased

25,000

70,000

2,000

18,800

 

18,000

2,000

5,000

500

Carriage on goods sold

Rent and rates of workshop

Fuel, gas and water etc.

Repairs to plant

Depreciation on machinery

Office expenses

Direct chargeable expenses

Advertising

Abnormal loss of raw materials

1,500

2,500

1,000

600

1,400

1,500

800

1,200

1,200

Cost Sheet or Statement of Cost

PARTICULARS

AMOUNT

AMOUNT

Material Consumed:

Opening Stock

Purchases

Carriage on Purchases

 

25,000

70,000

500

 

Less: Return

95,500

2,000

 

Less: Abnormal loss

93,500

1,200

 

Less: Closing Stock

92,300

18,800

 

73,500

Productive Wages

Direct chargeable expenses

18,000

800

Prime Cost

Work’s overheads:

Non-productive wages

Rent, rates of workshop

Fuel, gas, water etc

Repairs to plant

Depreciation on Machinery

 

 

2,000

2,500

1,000

600

1,400

92,300

 

 

 

 

 

7,500

Work’s Cost

Office overheads:

Salaries to Office staff

Office expenses

 

 

5,000

1,500

99,800

 

 

6,500

Cost of production

Selling & distributing Overheads:

Carriage on goods sold

Advertising

 

 

1,500

1,200

1,06,300

 

 

2,700

Cost of sales

1,09,000

Note: Abnormal loss of materials should be excluded from cost and debited to Costing profit and loss A/c, hence it has been deducted from material cost.        

13. The following data relate to the manufacture of a standard product during the four-week period to June 30th, 2011:

Particulars

Rs.

Raw materials consumed

Wages

Machine hours worked

Machine hour rate

Office overhead

Selling overhead

Units produced

Units sold

4,000

6,000

1,000

50 paise

20% on works cost

6 paise per unit

20,000

18,000 @ Re. 1 per unit

You are required to prepare a cost sheet showing the cost per unit and profit for the period.

Cost Sheet or Statement of Cost

Output – 20,000 units

Period: 4 weeks ended 30-06-11

PARTICULARS

TOTAL AMOUNT (Rs.)

PER UNIT (Rs.)

Raw Material consumed

Wages

4,000

6,000

0.200

0.300

Prime Cost

Add: Work’s overhead:

1,000 hours @ Re. 50

10,000

 

500

0.500

 

0.025

Work’s Cost

Add: Office overhead:

(20% of Work’s Cost)

10,500

 

2,100

0.525

 

0.105

Cost of Production

Less: Closing Stock (2,000 units @ Re. 0.630)

12,600

1,260

0.630

Cost of goods sold (18,000 units)

Add: Selling overhead:

0.60 per unit on 18,000 units

11,340

 

1,080

0.630

 

0.060

Cost of sales

Profit (Balancing figure)

12,420

5,580

0.690

0.310

Sales

18,000

1.000

14. From the following particulars you are required to prepare a monthly cost sheet of a manufacturing company showing cost and profit per 1,000 units of production. Show also in the form of a summary the cost of sales, net profit and sales for the month. The company manufacturers only one type of product. The opening stock was valued at the same price per 1,000 units as the production of the month concerned.

Particulars

Amount

Materials:

     Basic raw materials

     Stores

Labour:

     Direct

     Indirect

Overheads:

     Works

     Office

Production for the month of November, 2010

Sales for the month

Stock at the beginning of the month

Stock at the end of the month

 

1,400 tonnes @ Rs. 5 per ton

Rs. 5,000

 

16,000

3,000

 

25% of direct labour

10% of works cost

10,00,000 units

9,00,000 units @ Rs. 50 per 1,000 units

2,00,000 units

3,00,000 units

Cost Sheet or Statement of Cost

PARTICULARS

TOTAL AMOUNT

UNIT

Basic raw materials: 1,400 tonnes @ Rs. 5 per tones

Direct Labour

7,000

16,000

700

1,600

Prime Cost

Indirect materials

Indirect Labour

Work’s overhead (25% of direct labour)

23,000

5,000

3,000

4,000

2,300

500

300

400

Work Cost

Office overhead (10% of work’s cost)

35,000

3,500

35.00

3.50

Cost of production

Add: Opening Stock: 2,00,000 unit @ Rs. 38.50 per thousand unit

38,500

7,700

38.50

 

Less: Closing Stock: 3,00,000 unit @ Rs. 38.50 per thousand unit

46,200

11,550

Cost of goods sold (9,00,000 units)

Profit (Balancing figure)

34,650

10,350

 

11.50

Sales

45,000

50.00

15. The following figures for the month of April, 2011 were extracted from the records of a factory:

Particulars

Rs.

Opening stock of finished goods (5,000 units)

Purchase of raw materials

Direct wages

Factory overhead

Administration overhead

Selling and distribution overhead

Closing stock of finished goods (10,000 units)

Sales (45,000 units)

45,000

2,57,100

1,05,000

100% of direct wages

Re. 1 per unit

10% of sales

?

6,60,000

Prepare a cost sheet for the month of April, 2011, assuming that sales are made on the basis of ‘first-in-first-out’ principle.

Statement of cost

Output: 50,000 units (See Note – 1)

Period: April, 2011

PARTICULARS

TOTAL AMOUNT (Rs.)

PER UNIT (Rs.)

Raw Material

Direct Wages

2,57,100

1,05,000

5.142

2.100

Prime Cost

Add: Factory Overhead (100% of direct wages)

3,62,100

1,05,000

7.242

2.100

Work’s Cost

Add: Administration overhead (Re. 1 per unit)

4,67,100

50,000

9.342

1.000

Cost of production

Add: Opening Stock of finished goods

5,17,100

45,000

10.342

 

Less: Closing Stock of finished goods (10,000 units @ Rs. 10.342) (See Note 2)

5,62,100

1,03,420

Cost of goods sold (45,000 units)

Add: Selling and distribution overhead @ 10% of sales

4,58,680

66,000

 

1.467

Cost of Sales

Profit (Balancing figure)

5,24,680

1,35,320

11.809

2.858

Sales (See Note – 3)

6,60,000

14.667

Note – 1: Production during the month: [Sales 45,000 unit + closing stock 10,000 units – opening stock 5,000 units] = 50,000 units.

Note – 2: Since goods have been sold on FIFO basis the entire closing stock represents current production @ Rs. 10.342 per unit, because sales include all opening stock and part of current production.

Note – 3: Per unit sale Rs. 14.667 has been obtained by dividing Rs. 6,60,000 by 45,000 sales units.

16. The Tripati Electricals Ltd. manufacturers one product. A summary of its activities for 2010 is as follows:

Particulars

Units

Rs.

Sales

Material inventory:

     1.1.10

     31.12.10

Work-in-progress inventory:

     1.1.10

     31.12.10

Finished goods:

     1.1.10

     31.12.10

Material purchases

Direct labour

Manufacturing overheads

Selling expenses

General and administration expenses

80,000

 

 

 

 

 

 

 

16,000

24,000

8,00,000

 

40,000

32,000

 

55,000

72,000

 

64,000

-

1,52,000

1,45,000

1,08,000

50,000

40,000

Prepare a cost sheet showing:

a)    The total cost of goods manufactured (finished), the number of units manufactured (finished) and the cost per unit; and

b)   The cost of goods sold for the year presuming the company uses the LIFO inventory costing method for its finished goods inventory.

Statement of cost

Output: 88,000 units (See Note – 1)

Period: Year ended 5/12/10

PARTICULARS

TOTAL AMOUNT (Rs.)

PER UNIT (Rs.)

Materials Consumed:

Opening Inventory                                       40,000

Purchases                                                    1,52,000

                                                                      1,92,000

Less: Closing inventory                                32,000

Add: Direct labour

 

 

 

 

1,60,000

1,45,000

 

 

 

 

1.81818

1.64773

Prime Cost

Add: Manufacturing overhead:

3,05,000

1,08,000

3.46591

1.22727

 

Adjustment for work-in-progress

Opening                                                         55,000

Closing                                                       (-) 72,000

4,13,000

 

 

(-)17,000

4.69318

 

 

(-)0.19318

Work Cost

Add: General and Administration expenses:

3,96,000

40,000

4.50000

0.45455

Total Cost of goods manufactured

Add: Opening Stock (16,000 units)

4,36,000

64,000

4.95455

 

Less: Closing Stock (24,000 units) (See Note – 2)

5,00,000

1,03,636

Cost of goods sold (80,000 units)

Add: Selling and Distributive overhead

3,96,364

50,000

 

0.625000

Cost of sales

Profit (Balancing figure)

4,46,364

3,53,363

5.57955

4.42045

Sales

8,00,000

10.00000

Working Note: Note – 1: Production during the month: (Sales 80,000 units + closing stock 24,000 units – opening stock 16,000 units) = 88 units.

Note – 2: Value of closing stock on LIFO basis:

Rs.

16,000 units @ Rs. 4 per unit

8,000 units @ Rs. 4.95455 per unit

64,000

39,636

1,03,636

 

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