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PROFORMA COST SHEET FOR THE PERIOD ENDING..

Particulars Rs

Direct material Cost


Opening stock of RM + Purchases of RM + Carriage Inwards - Closing Stock of RM COST OF MATERIALS CONSUMED Direct labor cost Direct Expenses PRIME COST XXXX XXX XXX XXX XXXX XXX XXX XXXX

Indirect Factory Cost


Factory overhead + Opening stock of WIP - Closing stock of WIP Work Cost XXX XXX XXX XXXX

Contd

. Office & Administrative overheads COST OF PRODUCTION + opening stock of FG - Closing stock of FG COST OF GOODS SOLD Selling & Distribution overheads TOTAL COST OF SALES PROFIT SALES XXX XXX XXX XXX XXX XXX XXX XXX XXX

PROBLEM 1:38&39 FROM THE FOLLOWING PARTICULARS YOU AREREQUIRED TO PREPARE A STATEMENT SHOWING : 1. 2. 3. 4. value of materials consumed Total cost of production Cost of goods sold The selling price of each unit of the commodity

Particulars Opening Stock of Raw Materials Opening Stock of finished goods(400units) Wages paid to laborers Raw materials bought Closing Stock: 1.Raw Material 2. Finished Goods(800 units) Chargeable expenses Rent Rates and Taxes(Factory) Motives power Factory heating& lighting Factory Insurance Income tax paid Experimental expenses Waste Materials Office salaries

Rs 25000 20000 100000 250000 20000 25000 10000 25000 10000 10000 5000 6000 2500 1000 20000

CONTD Printing & Stationary Salesmen s Salary Commission to Travelling agents Cost of Free samples Donations to charitable funds WIP- on 1st Jan On 31st Dec 1000 10000 5000 500 1000 900 3000

Other selling expenses were calculated to be 20 paise per unit. Total production during the year Was 6400 units. If a profit of 25% on sales is to be realised what would be the total sales?

Solution:Particulars Opening Stock of RM Add- Pur of RM Less- Closing stock of RM Cost of Material Consumed Direct Wages Chargeable exp Prime Cost Factory Cost:Rent Motive Power Heating Insurance Experimental expenses Waste Materials

Cost sheet
Rs 25000 250000 275000 20000 Total Cost Cost Per Unit

255000 100000 10000 365000

25000 10000 10000 5000 2500 1000

Particulars

Rs 53500

Total Cost

Cost Per Unit

Add- opening stock Of WIP

900 54400

Less- closing stock of WIP

3000

51400 416400

8.03 65.06

Work Cost Office on cost Salaries Printing Cost of production Add- opening stock of FG Less- closing of FG

20000 1000

21000 437400 20000 457400 25000 432400

3.28 68.34 ----68.34 ----72.066

Particulars Selling & Distribution O/H Salary Commission Free Samples Other Selling exp Cost of Sales Profit 1/3 on cost Sales WORKING NOTES:-

Rs

Total Cost

Cost Per Unit

10000 5000 500 1200 16700 449100 149700 598800 2.784 74.85 24.95 99.80

Calculation of other selling expenses on units sold Units produced Add- opening stock of FG 6400units 400units 6800 units 800units 6000 units

Less- closing stock

Units sold

Particulars

Rs

Total Cost

Cost Per Unit

For 6000 units @ Rs. 0.20p = Rs. 1200 (2) Calculation of Profit on cost price Selling Price= Cost Price + Profit 100= 75+25 = 25/75*449100=149700 3) Donations to charitable fund, and IT paid are items of pure finance hence they are Not included in cost sheet

Problem 2: pg 40 Tirupathi electronics Ltd, Produces a standard product and provides you the following information for the year ending 31st march,2010

Particulars Opening Stock of Raw Materials Purchases Closing Stock Direct Wage Other direct expenses Factory overheads Office overheads Selling expenses FG- opening stock 1000 units Produced during the year Closing stock

Rs 10000 85000 4000 20000 10000 100% of direct wages 10% of work cost Rs.2 per unit Rs. 16000 10000 units 2000 units

Prepare cost sheet for the year ending 31st March 2010. Also ascertain the Selling price per unit sop as to yield the profit of 20% on the selling price.

Solution:Particulars Opening Stock of Material Consumed Direct Wages Other direct expenses Prime Cost Factory overheads (100% Direct Wages) Factory Cost Office & Admn overhead 10/100*14100 Office cost Add- opening stock of FG Less- closing stock(2000units@rs. 15.51) Cost of goods sold

Cost sheet
Rs 91000 20000 10000 121000 20000 141000 Total Cost Cost Per Unit 9.10 2.00 1.00 12.10 2.00 14.10

14100 155100 16000 171100 31020 14080

1.41 15.51

Particulars Selling & distribution overheads 9000units @ rs.2/- PU Cost of sales Profit Sales

Rs

Total Cost

Cost Per Unit

18000 158080 39520 197600

Selling price per unit= 197600/9000= Rs.21.96 Working note:Calculation of Unit Sold Opening Stock of FG Add- Produced during year Less- Closing Stock of FG Unit Sold Calculation of Profit Selling Price = Cost Price + Profit 100= 80+20 158080*20/80= 39.520

1000 10000 2000 9000

Problem 3: pg 43 The following details have been obtained from the cost records of comet paints ltd.

Particulars Stock of RM on 1-9-2010 Stock of RM on 30-9-2010 Direct Wages Indirect Wages WIP on1-9-2010 WIP on 30-9-2010 Purchase of RM Factory rent, Rates and Power Depreciation on P& M Carriage on purchases Office rent and taxes Stock of FG on 30-9-2010 Stock on FG 1-9-2010

Rs 75000 91500 52500 2750 28000 35000 66000 15000 3500 1500 2500 31000 54000

It is estimated that the Selling & distribution overhead is 10% of sales and profit is 10% on sales. Prepare the cost sheet giving the maximum breakup of cost and profit.

Solution:Particulars Opening stock of RM Add- Purchase of RM Carriage inwards Less- closing stock of RM Cost of material Direct wages Prime cost Factory Overheads:Indirect wages Factory rent, rates& power Depreciation on plant Add- opening Stock of WIP Less- closing Stock of WIP Works Cost Office & Administrative overhead office rent Office Cost

Cost sheet
Rs 75000 66000 1500 142500 91500 51000 52500 103500 2750 15000 3500 Rs

21250 124750 28000 152750 35000 117750 2500 120250

Particulars Add- opening stock of FG Less- closing stock of FG COGS Selling & Distribution Cost of Sales Profit sales

Rs

Rs 54000 174250 31000 143250 17906 161156 17906 179062

Working Notes;Let SP 100 Less- Profit 10% 10 Cost of sales 90 Less- selling & Distribution 10--------- 10% on sale CP 80 Calculation of Selling & Distribution overheads CP+ profit= Cost of Sales 80+10=90 10/80*143250=17906 Calculation of profit SP= CP+ Profit= 100= 90+10 10/90*161156(i.e. cost of sales)

Problem 4: pg 50 The following fig are extracted from the books of factory after the close of the year:
Particulars Opening Stock Purchases during the year Closing Stock Direct Wages Rs. 14000 100000 10000 20000

Work Overhead -50% on direct wages Stores overhead on materials- 10% on the cost of materials 10% of the casting were rejected being not upto specification and a sum of Rs. 800 was realised on sale of scrap. 10% of the finished castings were found to be defective in manufacture and were rectified by expenditure of a additional works overhead charged to the extent of 20% on the proportionate direct wages. The total gross output of costing during the year 2000 tons. Find out the manufacturing cost of the saleable casting per ton.

Solution:Particulars Opening Stock of RM + Purchases -Closing stock of RM Cost of materials Consumed Direct wages Prime Cost Work Overhead- 50% of Direct wages stores Overhead- 50% of Direct materials Total cost of gross output -Sales of rejected costing Cost of finished Costing Additional cost of rectifying Manufacturing Cost

Cost sheet
Quantity RS 14000 100000 10000 104000 20000 124000 10000 10400 144400 800 143600 360 143960 RS

2000 200 1800 --1800

Working Note: Cal of cost of rectification 20/100of proportionate wages is the additional cost i.e. 20/100*20000=4000. For 2000 tons the cost is Rs.4000 therefore, 180tons=? 180*20/100= 360

Problem 5: pg 51 Prepare a cost sheet showing cost and profit for 1000 bricks
Particulars Fuel (coal) Wages Royalties Depreciation on equipment Handling charges Work expenses Administrative expense Production data Bricks made Stock on 1-1-2010 Stock on 30-6-2010 Actual breakage Bricks sold 5200000 100000@Rs. 40 per 1000 1100000 200000 4000000 @ Rs.50 per 1000 Rs. 2500kgs@ Rs. 15per kg 10 laborers for 150days @Rs.50 per day 0.75 per 1000 bricks @10% on Rs. 150000 0.50 per 1000 bricks 10% of wages and coal 5% of wages and coal

Solution:Particulars Coal: 2500kgs@ Rs.15 per kg Wages: 10*150*50 Royalty Prime cost Works exp- 10% of wages & coal Handling Charges Dep- 10% on Rs. 150000 Work Cost Administrative exp- 5% of wages & Coal Cost of Production + Opening stock - Closing stock Cost of bricks sold Profit Sales

Cost sheet
Cost per 1000 bricks 7.50 15.00 0.75 23.25 2.25 0.50 3.00 29.00 1.125 30.125 Total cost for 5000000 37500 75000 3750 116250 11250 2500 15000 145000 5625 150625 4000 33138 121487 78513 200000

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