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.

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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

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