# Cost Sheet Solved Practical Problems | (Part 2)

[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 3 and Part 4 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 2)

11. The accounts of the Steelways 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.

Ans:

Cost Sheet or Statement of Cost

 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:

 Rs. 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

Ans:

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.

Ans:

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

Ans:

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:

 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.

Ans:

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.

Ans:

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

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:

 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:

1.    Compute the value of raw materials purchased; and

2.    Prepare a cost statement showing the various elements of cost and also the profit earned.

Ans:

Cost Sheet or Statement of Cost

 PARTICULARS TOTAL 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 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.

Ans:

Cost Sheet

Output: 1,000 units (See Note – 1)

Period: July, 2011

 PARTICULARS TOTAL AMOUNT Rs.                      Rs. COST PER UNIT Rs. 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:

 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.

Ans:

Cost Sheet or Statement of Cost

 PARTICULARS TOTAL 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