Problem 2

a)

Material Used 180000

Manual and Machine Labour wages 160000

Prime Cost 340000 =E5+E6

Works Overheads 40000

Works Cost 380000 =E8+E10

Establishment Expenses 19000

Total Cost 399000 =E12+E14

Works OH % of Direct Labour 25 %

Establishment Expense % of works cost Esta. Exp./works cost

5%

b)
DM 8000
DL 6000
Prime Cost 14000 =E25+E26

Works OH 1500 =E26*E18/100

works Cost 15500

Establishment and gen. exp. 775 =E30*E22/100

Total Cost 16275

Profit 4068.75 =E34*25%
Revenue 20343.75 =E34+E35

Problem 3

DM
Opning inventory 3000
Raw Material Purchased 110000
Closing Inventory 4000

Material Used 109000 =G43+G44-G45

DL
Direct Labour 65000

Chargeable expenses/Direct expenses 10000

Prime Cost (DM+DL+DE) 184000 =G47+G50+G52

Factory OH 50% of direct labour

Factory overheads 32500

Works Cost Gross (PC+Factory OH) 216500 =G58+G54

Opening inventory of WIP 4000

Closing Inventory of WIP 6000

Works Cost Net (Works cost gross + op. WIP - Clo. WIP)

Works Cost Net 214500 =G60+G62-G63

Administration overheads (10% of works cost) 21450 =G67*10%

Cost of Production 235950 =G67+G69

Adjustment of FG
Opening Inventory of FG 8000
Cost of Production 235950
Closing Invetory of FG 7000

COGS 236950 =G74+G75-G76

Selling Overheads (5% of sales) 13750 sales

Cost of sales (COGS +Selling OH) 250700 =G78+G80

Gross Margin (Sales - Cost of sales) 24300

Sales 275000

Problem 4 cost p.u

Raw Material Consumed 4000
Wages 6000

Prime Cost 10000 =G91+G92 0.5

Factory OH
Machine OH (Hour worked*rate) 500 =1000*0.5

Works Cost 10500 0.525

Office OH (20% on works cost) 2100

cost of production (20000 units) 12600 0.63

Clo. Stock of FG (2000 units) 1260 =G103*2000/20000

COGS ( COP- Clo. Stock of FG) 11340

Selling OH ( 18000 unit @ .06 p.u.) 1080 0.06

Cost of Sales (18000 units) 12420 =G107+G109 0.69

Gross Profit 5580 0.31

Sales (18000 units @ 1 p.u.) 18000 1

275000