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Cost Sheet/Reconciliation:
A) Sagar Manufacturing Company gives you the following particulars for the year 2012. Production and sales
during the year was 20,000 units.
Particulars ₹ Particulars ₹
Material 5,00,000 Factory Overheads
Direct Wages 3,00,000 - Fixed 2,00,000
- Variable
Administrative Overheads (Fixed) 2,00,000 Selling & Distribution Overheads 4,00,000
Sales 24,00,000 - Fixed
Profit 5,00,000 - Variable 1,20,000
1,80,000
The company has worked to its maximum capacity of 20,000 units during the year 2012. The management has
decided to increase production capacity to 30,000 units for the year 2013 and it is estimated that:
a. There will be all around rise in all variable expenditure by 10 %
b. There will be increase of 20 % in all fixed overheads.
c. There will be no change in the selling price for the year 2013.
Prepare Cost Sheet for the year 2012 with cost per unit column and also prepare estimated cost sheet for the year
2013.
B) The net profit of Dhura Ltd. shown by cost accountant for the year ended 31st March, 2015 was ₹ 10,35,000 and
by financial accounts for the same period was ₹ 5,00,200. A scrutiny of the figures of the financial accounts and the
cost accounts revealed the following facts:
Particulars ₹
1. Administrative overhead under recovered in cost accounts 14,000
2. Factory overhead over-recovered in cost accounts 20,000
3. Depreciation over charged in financial accounts. 40,000
4. Interest on Investment 20,000
5. Loss due to obsolescence charged in financial accounts. 24,000
6. Abnormal labour wastage charged in financial accounts. 2,00,000
7. Income tax provided in financial accounts 2,80,000
8. Bank interest credited in financial accounts 4,000
9. Stocks adjustment credited in financial accounts 28,000
10. Loss due to depreciation in stock values charged in financial accounts 48,000
Prepare Reconciliation Statement.
C) Following details are furnished by Deepak Ltd. of expenses incurred during the year ended 31 st March, 2014:
Particulars ₹
Direct Material 3,42,000
Opening Stock of Finished Goods (1,000 Units) 85,250
Closing Stock of Finished Goods (2,000 Units) ?
Depreciation on Plant & Machinery 96,000
Loss on Sale of Machinery 17,500
Demonstration Expenses 85,500
Direct Expenses 1,60,000
General Manager’s Salary 3,80,000
Dividend Paid 7,800
Direct Wages 2,00,000
Works Manager’s Salary 1,00,000
Advertisement 1,85,250
Depreciation on Computer 1,72,000
Purchase of Machinery 1,90,000
Depreciation on Delivery Van 1,14,000
Office Maintenance Charges 1,88,000
Other Factory Overheads 2,04,000
Goodwill written Off 25,000
Sales (19,000 units) 22,80,000
Closing Stock of Finished goods to be valued at cost of production. You are required to prepare total cost and per
unit cost. Also find out Total Profit and per unit profit.
D) Given below the Trading and Profit & Loss Account for Vikas Electronics for the year ending 31-3-2014.
Particulars ₹ Particulars ₹
To Material Consumed 3,00,000 By Sales (2,50,000 Units) 7,50,000
To Direct Wages 2,00,000
To Factory Expenses 1,20,000
To Office Expenses 40,000
To Selling & Distribution Expenses 80,000
To Net Profit 10,000
7,50,000 7,50,000
Normal output of the factory is 2,00,000 units. Factory overheads are fixed up to ₹ 60,000 and office expenses are
fixed. Selling & Distribution Expenses are fixed to the extent ₹ 50,000.The remaining expenses are variable. Prepare
Reconciliation Statement.
Contract Costing:
A) A construction company undertook a contract at an estimated price of ₹ 108 lakh, which include budgeted profit
of 18 lakh. The relevant data for the year ended 31-3-2018 are as under:
₹(‘000)
Materials issued to site 5,000
Direct wages paid 3,800
Plant hired 700
Site office costs 270
Materials returned from site 100
Direct expenses Work certified 500
Progress payment received 10,000
A special plant was purchased specifically for this contract at ₹ 8,00,000 and after use on contract till the end of 31-3-
2018 it was valued at ₹ 5,00,000. The cost of materials at site at the end of the year was estimated at ₹ 18,00,000.
Direct wages accrued as on 31-3-2018 was ₹ 1,10,000. You are required to prepare the Contract Account for the year
ended 31st March, 2018 and compute the profit to taken to the Profit and Loss Account.
B) A building contractor furnishes the following records about a contract commenced on 1st April. 2017. Expenses
incurred on the contract upto 31st December, 2017 were:
₹
Materials purchased 21,500
Wages paid 50,110
Foreman's salary 6,310
Administrative expenses 12,610
Machinery purchased 15,000
A supervisor with a monthly salary of 1,000 has spent about half of his time on this contract.
Materials at site on 31-12-1017 were worth ₹ 2,480. The machinery purchased was used for 73 days. The estimated
life of the machine is 5 years and its scrap value is estimated at ₹ 1,000. The contract price is fixed at ₹ 2,20,000. On
31st December, 2017 two-thirds of the contract was completed. Work certified was worth ₹ 1,20,000 and ₹ 90,000
have been paid on account. Prepare the contract account.
C) . Product A is obtained after it is processed through three distinct processes. The following information is available
for the month of March, 2014:
Particulars Process X Process Y Process Z
No. of Units introduced in the Process 500 - -
Rate per unit of Units introduced (₹) 4.00 - -
Cost of Material 2,600 2,000 1,025
Direct Labour 2,250 3,680 1,400
Production Overheads 2,250 3,680 1,400
Normal Loss ( % of Units introduced) 10 % 20 % 25 %
Value of Scrap per Unit (₹) 2.00 4.00 5.00
Output in units 450 340 270
There is no stock in any process. You are required to prepare the Process Accounts.
D) Amla Construction Ltd. entered into a contract to construct a bungalow. The contract value is ₹ 19,50,000 to be
realised in installment on the basis of the of work certified by the architect subject to a retention of 10%. The work
commenced on 1-4-2013 but it remained incomplete on 31-12-2013. The facts and figures of the contract are:
₹