Performa of Cost Sheet Particulars Amoun Amoun

t t
Opening Stock of Raw Material             ***  
Add: Purchase of Raw materials               ***  
Add: Purchase Expenses                              ***  
Less: Closing stock of Raw Materials           ***  
            Raw Materials Consumed             ***  
            Direct Wages (Labour)                ***  
            Direct Charges                     ***  
Prime cost (1)                                                                   ***
Add :- Factory Over Heads:   
            Factory Rent                                     ***
            Factory Power                                ***
            Indirect Material                           ***
            Indirect Wages                                                        Supervisor ***
***
Salary                      ***
            Drawing factory Salary              ***
            Factory Insurance                      ***
            Factory Asset Depreciation
Works cost Incurred                                                           ***
Add: Opening Stock of WIP                                       ***  
Less: Closing Stock of WIP                                            ***
Works cost (2)                                                                   ***
Add:- Administration Over Heads:-   
            Office Rent                                   ***
            Asset Depreciation                      ***
            General Charges                           ***
            Audit Fees                                   ***
            Bank Charges                               ***
            Counting house Salary                      ***
            Other Office Expenses       ***
Cost of Production (3)                                                     ***
Add: Opening stock of Finished Goods                        ***  
Less: Closing stock of Finished Goods                          ***
Cost of Goods Sold   ***
Add:- Selling and Distribution OH:-   
            Sales man Commission                         ***
            Sales man salary                              ***
            Traveling Expenses                            ***
            Advertisement                                 ***
            Delivery man expenses                   ***
            Sales Tax                                             ***
            Bad Debts                            ***
Cost of Sales (5)                                                              ***
Profit (balancing figure)                                                  ***
Sales      ***
Notes:-
1) Factory Over Heads are recovered as a percentage of direct wages 
 
2) Administration Over Heads, Selling and Distribution Overheads are recovered as a percentage of
works cost.

Problem 1

Staples ltd , a manufacturing company, incurred the following expenses during a

certain period. You are required to prepare a statement showing the subdivision of
total cost.

Particulars Amount (Rs) Particulars Amount (Rs)

Materials used on jobs 1,20,540 Depreciation of plant 3,800

Wages traceable to jobs 86,650 Depreciation of delivery vans 1,600

Wages paid to men for Insurance on finished goods 2,500

maintenance work 12,600 Lubrication oil 250

Salaries of sales men 15,100 Bad debts 300

Directors’ fees 10,000 Commission to salesmen 2,850

Carriage inwards on raw Cost of idle time in factory 510

materials 860 Auditors fees 3,800

Carriage outwards 2,800 Dividends paid 6,800

Factory rent and rates 8,300 Lighting of showroom 1,500

Works salaries 20,400 Office salaries and expenses 7,000

Direct Expenses 1,300 Income tax 8,600

Consumable stores 340

Problem 2

The following figures are taken from the books of a manufacturing company for the year
ended on March 31, 2020. Prepare a cost sheet showing clearly the cost per unit under the
various elements and also the profit or loss per unit.

Particulars Rs. Particulars Rs

Direct materials 25,00,000 Sales Branch office expenses 30,000
Direct labor 8,00,000 Depreciation of office 10,000
Depreciation of factory building 16,000 building
Insurance: Depreciation of staff cars 15,000
Staff cars 2,000 Electricity (including Rs.
Office building 1,500 5,000) for administrative 35,000
Factory building 2,000 office)
Delivery van-maintenance and Advertisement 18,000
running expenses 12,000 Sundry factory expenses 4,20,000
Salaries (including that of Sales Sales promotion 4,000
Manager Rs. 20,000 and Factory Office administration
Chief Engineer -Rs.25,000) 2,75,000 expenses 60,000
Finished goods warehouse expenses 15,000 Expenses for participating in
industrial exhibition 8,000
Sales price per unit (10,000
units) 500
Units produced-10,000
Problem-3

From the following figures, prepare separate statements of cost and profit
for the month of October 2019.
Stock on 1st October, 2019  

Raw materials 60,600.00

Finished goods 35,900.00

Stock on 31st October, 2019  

Raw materials 75,000.00

Finished goods 30,900.00

Work-in-progress:  

On 1st October, 2019 125,600.00

On 31st October, 2019 142,200.00

Purchase of raw materials 285,700.00

Sale of finished goods 1,340,000.00

Direct wages 375,000.00

Factory expenses 212,500.00

Office and administration expenses 103,400.00

Selling and distribution expenses 75,000.00

Sale of scrap (created during production) 2,600.00

Problem- 4
The following figures for the month of April 2019 were taken from the records of a factory:
 Rs.
Opening stock of finished goods (5000 units) 45,000
Purchase of raw materials 2,57,100
Direct wages 1,05,000
Factory overhead 10% of direct wages
Administration overhead Re. 1 per unit
Selling and distribution overhead 10% of sales
Closing stock of finished goods (10000 units) 103,420
Sales (45000 units) Rs. 6,60,000

Prepare a cost sheet for the month of April 2019 assuming that the sales are made on the
basis of first in first out principle.

Problem-5

From the following details related to production and sales for the year ended on
December 31, 2019, prepare a cost statement showing the following things:

 Prime cost
 Works cost
 Cost of production
 Cost of sales
 Profit or loss

Stock on 1.1.2019: Rs.

(a) Raw materials-- 25,000
(b) Work in progress--
At prime cost Rs. 30,000
Add manufacturing expenses Rs. 6,000 36,000

(c) Finished goods (at cost) 1,44,000

Raw materials purchased 2,00,000
Freight on raw material 10,000
Machines hours worked-- 48000 hours
Chargeable expenses 50,000
Factory wages for direct labor 2,70,000
Administration expenses 1,00,000
Selling expenses 54,000
Distribution expenses 36,000
Sales proceeds of finished goods (30000 units) 9,00,000
Stock as on December 31, 1992:
(a) Raw materials 45,000
(b) Work in progress
At prime cost Rs. 45,000
 Add: Manufacturing expenses Rs. 9,000 54,000

(c) Finished goods at cost (10000 units)

Finished goods produced 32000 units

Apply FIFO principal in finished goods valuation.

Problem – 6

The accounts of a machine manufacturing company disclose the following information for
the six months ending 31st May,2020
Materials used 150000
Direct wages 120000
Factory overhead expenses 24,000
Office expenses 17640
Prepare a Cost Sheet of the machines and calculate the price which the company should
quote for the manufacture of a machine requiring materials valued at Rs 1,250 and
expenditure on productive wages of Rs 750, so that the price may yield a profit of 20% on
the selling price. For the purpose of price quotation, charge factory overhead as a
percentage of direct wages and charge office overhead as a percentage of works cost .

Problem 7

A factory produced and sold 1000 units of a product in July 2019 for which the
following details are available:

Rs.
Stock of direct material on 1.7.19 6,000
Purchase and receipt of direct materials in July 2019 1,44,000
Direct wages paid in cash in July 2019 55,000
(which includes Rs. 3000 on account of June 2019 and an advance of
Rs. 2000)
Works overhead charges for the month 60,000
Stock of direct materials on 31.7.19 10,000
Administration and selling overheads 25 per unit
Sales price 300 per unit

From the above details, you are required to:

(i) Prepare a cost statement for July 2019.

 (ii) Estimate the sale price of unit of the same product in August 2019 assuming:

 20% increase in direct materials cost

 10% increase in direct wages
 5% increase in works overhead charges
 20% reduction in administration and selling overhead charges
 Same percentage of profit on sales price as in July 2019

Problem-8

From the cost ledger of A.K. industries, the following information was obtained for the
year 2019:

Rs. Rs.
Rates and taxes for factory Repairs and maintenance 20,000
premises 2,800 Cost of rectification of
Lighting of the factory 5,200 defective work 5,600
Depreciation (plant) 7,000 Consumable stores 15,000
Staff salaries 24,000 Selling expenses 14,660
Management salaries 12,000 General expenses 9,200
Power 9,000 Receipt form the sale of scrap
Indirect wages 24,500 Profit form guest house 2,400
1,000

Production was 1,00,000 units, prime cost per unit of materials was Rs. 1.80 and wages
was Rs. 1.20. The net selling price was Rs. 4.70 per unit. All the units were sold.

As from January 01, 2020, the selling price was reduced to Rs. 4.50 per unit. It was
estimated that the production could be increased in 2020 by 50 percent without incurring
any overtime or extra shift.

Prepare statements showing different element of cost for 2019 and estimated cost and
profit for 2020 assuming that 1,50,000 units will be produced and sold in the year. State
the assumption made to solve the problem.

Problem-9

Following figures are available from the books of a manufacturing company for the
year ended on 31.12.2019:
 Rs. Rs.
Materials: Profit for the year 6,090
Stock on 1.1.19 1,000 Selling overhead 5,250
Stock on 31.12.19 2,000 Factory overhead 4,500
Purchase during 2019 10,000 Administration overhead 4,200
Wages 7,500

a. Prepare a cost sheet showing the following:

 Prime cost
 Works cost
 Cost of production
 Cost of sales
 Sales

b. In 2020, the factory receives an order for a job which will require materials of
Rs. 1,200 and wages Rs. 750. Ascertain the sale price of the job if the factory
intends to earn a profit 10% higher than the percentage of profit earned in 2019.
Assume that factory overhead has gone up by 16 2/3 % and selling overhead has gone
down by 20% in 2020. Further assume that factory overhead is recovered as a
percentage of the wages and administration and selling overhead as a percentage of
works cost.