Saturday, April 27, 2019

Jain and Narang's Book Solved Practical Problems: Cost Sheet (1)


JAIN AND NARANG’S BOOK PRACTICAL PROBLEM SOLVED
Solution of Problem No. 1

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

Solution of Problem No. 2

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

Solution of Problem No. 3

Ans:
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

Solution of Problem No. 4
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

Solution of Problem No. 5

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

Solution of Problem No. 6

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

Solution of Problem No. 7

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 (15,030+13,500+2,000)                                           30,530                                                         
Selling and Distribution overheads (1,200+7,650)                                                                  8,850
98,590


39,380
Net Profit
59,210

Solution of Problem No. 8

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

Solution of Problem No. 9

In the books of a Manufacturing firm
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%

Solution of Problem No. 10

Statement of Cost Sheet
PARTICULARS
UNIT
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)


Solution of Problem No. 11

Statement of Cost
PARTICULARS
UNIT
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)

Solution of Problem No. 1 2

Statement of 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



Solution of Problem No. 1 3
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.

Solution of Problem No. 1 4

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

Solution of Problem No. 1 5

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

Solution of Problem No. 1 6

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

Solution of Problem No. 1 7

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

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