e Pharmaceutical industry: Cartons used for holding stri for holding cartons. for holding strips of tablets a" Textile industry: Card board boxes used for holding cones on which yarn is woven e © Confectionary Industry: Jars for holding wrapped chocolates, Cartons ‘containing Packs of biscuits. lates, Cost of secondary packing materials shall f ads. form part of distribution een ce to pack the cost object taking i 7. Reusable Packing Material is the packing materials . A 4 Is that sed more product. The packing material cost of reusable packing shall be assign tothe J Protccount the number of times or the period over which itis expected (© be reuse Mustration 1: are packed in each achets 2°27 airconditioned 0 Ik deP ear which the factory Milk is produced in a factory and packed in half liter sachets. 100 s: Motallic reusable container and the containers are transported to mil he depots and sold in retail. State the element of cost trucks, refrigerated in t! has to classify the following items as per Cost Accountancy Standards. 1. Cost of the Sachets 2. Cost of the Containers 3. Transportation Costs 4. Refrigeration Costs 5. Depot's Expenses - like rent, salary of staff, ete. 6. Cost of advertising for the milk (1ewa Inter, De 1c. 15, adapted) Solution : Ra 1. Cost of the Sachets 2. Cost of the Containers 3. Transportation Costs 4. Refrigeration Costs 5. Depot's Expenses 6. Advertisement Cost Cc Production Overhead Selling and Distribution Overhead Distribution Overhead Distribution Overhead Selling and Distribution Overhead Selling and Distribution Overhead awe? Primary Packing Material Secondary Packing Material Relates to Finished Goods Storage of Finished Goods Marketing Cost Selling Expense fustration 2 : (Stock of Materials) : .s, the following details have been extracted From the books of accounts of M/s. Avdhoot Enterprise: for the Quarter Ending 31-3-2014 : Particulars Stock of Materials - Openi ~ Openini Stock of Materials - Closing urchases of Materials Direct Wages Direct Expenses Indirect Wages Salaries to Administrati tH Carriage inwards” SA Carriage Outwards Manager's Salary General Charges Legal Charges for Criminal Suit Scanned with ComScannerr rassification of Costs and Cost Sheets ‘commission on Sales ” oon . 26,000 Frctiity Charges (Factory) 7 6-000) Girectors’ Fees ae 72,000 “ - (36,000 63,000 irs to Plant and Machinery . ht, Rates and Taxes - Factory rent, Rates and Taxes - Office "5500 reciation on Plant and Machinery cee re ore i galesmen’s Salaries 50,000 18,000 judit Fees {1 The Manager's time is shared between the factory and the office in the ratio of 20 : 80. 2) Carriage outwards include € 7,500 being carriage inwards on Plant and Machinery. {a) Selling Price is 120% of the cost price from the above details prepare detailed cost sheet for the qua er ending 31-12-2014 and ascertain (TY.B.Com., March 2006, adapted) sales. solution : M/s. Avdhoot Enterprises Cost Sheet [For the Quarter Year Ended 31-3-2014) rep ELEMENT OF COST. a z ‘A. Direct Materials : Opening Stock 2,70,000 Purchases 12.48,000 Carriage Inwards "48,000 15,66,000} Less : Closing Stock 3,00,000 Net Direct Materials 12,66,000 B. Direct Wages 3,57,600| C. Direct Expenses 1,20,000) D. PRIME COST [A+B + c) 17,43,600 E. Works Overheads Indirect Wages 24,000 Manager's Salary (20%) 14,400 Fuel 96,000 Electricity 72,000) Repairs - Plant 63,000| Factory Rent etc. 18,000 Depreciation - Plant 45,000 Total Works Overheads 3,932,400 WORKS COST [D + E] 30,76,000 ‘Administrative Overheads : Salaries to Staff 60,000} Manager's Salary (80%) ee General Charges ar: Directors Fees 36,000 Office Rent etc. Re Depreciation - Furniture 900 Audit Fees 18,01 Total Administrative Overheads COST OF PRODUCTION IF + G) Sales / Distribution Overhead: 30,000 Cariago Outward (37,500 - 7,500) 28000 ommission on Sales 50,000 Salesmen’s Salaries Scanned with CamScanner288 Cost Accounting (T.¥.B.Com. : Total Sales / Distribution Overheads : J. COST OF SALES [H +1] K._ PROFIT (Bal. Fig.) L._ SALES (120% x 24,06,000) [J + K] Working Notes : (1) Legal charges for criminal suit ® 20,000) will be ignored while preparing cost sheet. (2) Carriage on machinery will be capitalised and so will be ignored in cost sheet. stration 3 : (Stock of RM) ‘The following particulars have been extracted from the books of M/s. Sohan Manufacturing Company for the year ended 31-03-2014 : Panticulars ‘Opening Stock of Raw Materials Closing Stock of Raw Materials Raw Materials Purchase Drawing Office Salaries Royalty on Production Carriage Inwards Cash Discount Allowed Repairs to Plant & Machinery Rent, Rates & Taxes (Factory) Rent, Rates & Taxes (Office) Office Conveyance Salesmen’s Salaries & Commission Productive Wages Depreciation on Plant & Machinery Depreciation on Ottice Furniture Directors Fees Gas and Water Charges (Factory) Gas and Water Charges (Otfice) Manger's Salaries Cost of Catalogues Printing Loose Tools Written off Trade-Fair Expenses Out of 48 hours in a week, Manager devotes 40 hours for factory and 8 hours for office per week fo the whole year. The Management has fixed the selling Price @ 110% of cost. Prepare detailed cost statement for the year ended 31-03-2014, (T.Y.8.Com., Mar. 08, adapted Solution : BOOKS OF M/S SOHAN MANUFACTURING COMPANY COST SHEET FOR THE YEAR ENDED 31-03-2014 ‘STEP ELEMENT OF COST ‘A. Direct Materials Opening Stock [Raw Materials} 2,35,000 Purchases. 10,40,000) Carriage Inwards 41,000 13,16,000| Less: Closing Stock [Raw Materials) (2,50,000)} Net Direct Materials 10,66,000 B. Direct Wages Productive Wages C. Direct Expenses Royalty on Production D. PRIME COST ‘Scanned with CamSeannerry asfcation of Costs and Cost Sheers g. Works Overheads Drawing Office Salaries Repairs to Plant & Machinery Factory Rent, Rates & Taxes Depreciation on Plant & Machi Factory Gas and Water Charges a Manager's Salary Loose Tools Written Off Total Works OH WORKS COST ‘Admin. Overheads Office Rent, Rates & Taxes Office Conveyance Depreciation - Office Furniture Directors Fees Office Gas and Water Charges Manager's Salary Total Admn. OH 4. COST OF PRODUCTION |. Sales/Distr. Overheads Salesmen Salary & Commission Catalogue Printing Trade Fair Expenses Total $ & D OH J. COST OF SALES K. PROFIT (10% of Cost) L,_ SALES (110% of Cost) Working Notes = 1. Cash Discount is Financial Expense. 2. Drawing office is an Engineering office, hence part of factory: 3. Manager's Salary Total for 48 Hours per week 60,000 For Factory (40/48 x 60,000) 50,000 For Office (8/48 x 60,000) 10,000 Mustration 4 > The following data have been extracted from the books of Shri Ganesh Industries Ltd. for the year wi7: Opening Stock of Raw Materials Purchases of Raw Materials Cosing Stock of Raw Material ooo Camiage inwards 75,000 ages (Direct) 40,000 Wages (Indirect) 15,000 Direct Charges . be and Rates : 5,000 actor -_Ofce” ; 500 ‘ivect Consumption of Materia! 1,500 Depreciation on Plant 100 Depreciation on Office Furniture Say: 2,500 . oe 2,000 oystlesman 5,700 Oner Factory Expenses 900 Unt! Office Expenses 12,000 Oeding Director's ‘Remuneration 1,000 Selling Expenses ‘Scanned with CamSeanner290 Cost Accounting (T.¥.B. Travelling Expenses of Salesman Carriage Outwards tog Sales ne Advance Income Tax Paid nnn Advertisement on 2.009 the offic 's Remuneration is to bo allocated % 4,000 to factory. £ 2.001 in s cated & 4, factory, £ 2,000 to nes 6,000 to selling departments. From the above information prepare a statement of cost shonin ot us Cost: (b) Works Cost; (c) Cost of Production; (d) Cost of Sales; (6) Net Profi. lution : (SYBAF, Oct. 2005, 2008, adapted) The Managing Director BOOKS OF SHRI GANESH INDUSTRIES LTO. COST SHEET FOR THE YEAR 2017 STEP ELEMENT OF COST 7 a z ‘A. Direct Materials Opening Stock [Raw Materials] 25,000 Purchases 85,000 Carriage Inwards 5,000 1,15,000 Less: Closing Stock [Raw Materials] (40,000) Net Direct Materials 75,000 B. Direct Wages 75,000 C. Other Direct Charges 45,000, D. PRIME COST 1,65,000 E. Factory Overheads Indirect Wages 10,000 Rent and Rates 5,000 Indirect Material 500 Depreciation on Plant 1,500 Other Factory Expenses 5,700 ‘Managing Directors Remuneration 4,000 Total Factory OH 26,700 F, WORKS COST 1,91,700 G. Administrative Overheads Rent and Rates 500 Depreciation on Office Furniture 100 Salary 2,500 Other Office Expenses ‘900 Managing Director's Remuneration 000 Total Admn. OH COST OF PRODUCTION 1,97.700 Sales / Distribution Overheads Salary 2,000 Managing Director's Remuneration 6,000 Other Selling Expenses 1,000 Travelling Expenses of Salesman 1,100 Carriage Outward 1,000 Advertisement 2,000 Total S & D OH J. COST OF SALES K. PROFIT (Balancing Figure) L. SALES (Given) . : is a financial item so it will not included in cost sheet. Working Note : Advance Income Tax Mustration 5 : From the following particulars you are 10% (b) To stata what percentage - (i) the manufacturin ‘oncost bear to the total cost of the goods sold. nt showing the total cost. quired : (a) to prepare a stateme rant oncost (i) the selling 1g cost (ji) the managemé Scanned with ComScannerFf psifeation of Costs and Cos Sher 291 5 Stock of Direct Materials [eee in Progress at Commencement 61,700 chase of Direct Materials 1,21,700 pest Wages 2,86,500 iyory on Cost 3,57,000 ing on COSt 1,99,500 janagement on Cost 70,000 wes 1,10,000 Gosing Stock of Direct Materials 12,80,000 ising Work in Progress 75,400 gale of Scrap ey Caniage on Direct Material nee Solution = (SYBAF, Oct. 2014, adapted) COST SHEET TEP ELEMENT OF COST ‘A. Direct Materials = Opening Stock 61,700 Purchases 2,86.500 Carriage Inward 5,950 3,54,150 Less: Closing Stock (75,400) Net Direct Materials 2,78,750 8. Direct Wages 357,000 ¢. PRIME COST 6,35,750 0. Work Overheads Factory oncost 1,99,500 Loss : Sale of Scrap 1,350 1,98,150 Work-in-Progress i Add Stock 21. Opening 3,19,850 Less : Closing Stock 135,800 Total Factory OH |-1.84,250 & WoRKs cost 820,000 Administrative Overheads Management oncost 30.00 Hi COST OF PRODUCTION ee |. Sales/Distr. Overheads Y Stopes | zone 1, SOSTOF SALES 2'50,000 . PROFIT Ces — 72,50,000 Working Ni 1. evens oo 000 00 |. Percentage of Manutacturing Cost to Total Cost= 79,00,000 * 100=62%) 1,10,000 Percentage of Management Oncost to Total Cost= 70,00,000 * 100.0 11% x 100 = 7% 70,000 Petcentage of Selling Oncost to Total Cost = 70,00,000 ‘Scanned with CamSeanner292 Cost Accounting (T.¥.B.Com, : Sexy, yeaton 6: (Stock of RM+FG+ Wp) rom the following particulars prepare cost sheet showing various laments of cost Particulars E ney Opening Stock of Raw Materials sao eee 110,009 Purchases of Raw Materials 25.004, Carriage Outwards 28.569 Direct Wages 4.24 40 Direct Power - 25.249 Technical Directors Salary es 405% Factory Rent, Rates & Insurance een 10,147 Sale of Factory Scraps 1465 Depreciation on Factory Buildings 75.200 Closing Work in Progress 1.20.26 Factory Stationary 12,240 Opening Stock of Finished Goods » 45.220 Closing Stock of Raw Materials + 36.920 Fees to Brand Ambassador 2,00,000 Stationery and Printing ” 12,200 Staff Salaries 6,30,000, Trade Discount 1,20,000 Office Rent 60,000 Free Sample Expenses 20.320 Closing Stock of Finished Goods 50,240 Sales are made to eam profit @ 10% on Cost Price. (ZY.8.Com., Oct. 2006, adapted) Solution : Cost Sheet ‘STEP ELEMENT OF COST. z z ‘A. Direct Materials: ‘Opening Stock oe 1,10,000 Purchases _8.25.000| 9,35,000 Less: Closing Stock B. Direct Wages C. Direct Expenses (Power) D. PRIME COST [A+B +C] E. Works Overheads: (36,920)| 8,98,080 Technical Directors Salary Factory Rent, ales and surance oso Depreciation on Factory Building 75,200 Factory Stationery 42/340] 7,38,270 Less : Sale of Scrap ‘W.460) 10 Work in Progress: t nee Less: Closing Stock of W-I-P 20,260) G. WORKS COST [D + E+ F] rd H. Office/Administrative Overheads: “ Printing and Stationery Office Rent co-c0d Staff Salaries 6,30,000| _7,02,200 |. COST OF PRODUCTION [G +H] we 7 120,64,070 J. Finished Goods: ‘ ‘Add: Opening Stock |_45,280 350 Less: Closing Stock Po K. COST OF GOODS SOLD [I+ J} 20,59,110 L. Sales / Distribution Overheads: ' Carriage Outward 28,500] Fees Paid to Brand Ambassador 2,00,000 Free Samples — 20,920], 2,48,820 ‘Scanned with Camseannerrr | classification of Costs and Cost Sheers 293 mu. TOTAL COST/COST OF saLes 7.930 WN. PROFIT (10% x 23,07,939) P3078 0. SALES [M+ NJ [25.38.7238 notes ¢ (1) Quantity Produced = Quantity Soig (2) Trade discount is not recorded as cost. ustration 7 : (Stock of RM + FG + w--p) fromthe following particulars, prepare forthe year ended 31st March, 2014. Particulars ale @ cost sheet showing the components of total cost and profit | Sock of finished goods on 1-4-2013 6,000 | Stock of finished goods on 31-3-2014 15,000 | Stock of raw materials on 1-4-2013 40,000 | Stock of raw materials on 31-3-2014 50,000 | Work in progress on 1-4.2013 15,000 Work in progress on 31-3-2014 10,000 Purchases of raw materials, 4,75,000 Cariage inwards 12,500 Wages fosueusan | 1475,000 Works Manager's Salary . : 30,000 Factory Employee's Salaries . 60,000 Factory Rent, Taxes & Insurance : 7.250 Power expenses 2 9/500 Other production expenses 43,000 Sales for the year vic 860,000 Income tax vo 5,000 Owvidend received oa 2.500 Interest on debentures eee 10,000 | Transfer to Sinking Fund : 20,000 Goodwit wntten off : 10.500 Seling Expenses 16,000 General Expenses 32,500 Solution : Cost Sheet [For the Year Ended 31-3-2014) STEP ELEMENT OF COST A. Direct Materials: | Opening Stock 40,000 Purchases 4,75,000 Camage inward —12.500 5,27,500 Less: Closing Stock Direct Wages PRIME COST [A + B] Works Overheads : Works Manager's Salary Factory Employee's Salary Factory Rent, Taxes & Insurance Power Expenses Other Production Expenses Work in Progress: Add: Opening Stock Less: Closing Stock ~ WORKS COST[C+D+E] . Office/Administrative Overheads: I Expenses COST OF PRODUCTION [F + G] ‘Scanned with CamSeanner294 |. Finished Goods: ‘Add: Opening Stock Less: Closing Stock J. COST OF GOODS SOLD [H + I] K. Sales/Distribution Overheads: Selling Expenses L. COST OF SALES [J + K]} M. PROFIT N. SALES [L+M] Noje : Following items are excluded from Cost Sheet: 1. Income tax, 2. Dividend received, 3. Inter rcbentres 4. Transfer to Sinking Fund, 5. Goodwill Written off Mustration 8 From the following information, prepare detailed Cost Statement for the year ended 31-3-2014. Particulars Opening Stock - Raw Materials + Finished Goods Gg 20.000) 30,000 Purchases of Raw Materials 15.00.00 Direct Wages sews |12,00,000 Power as 99,500 ‘Carriage on Purchase of Raw Materials 20,000 Cost of a Special Design See 50.000 Custom Duty and Octroi on Raw Materials ae 60,000 Rent and Rates - Ofice 50,000 = Factory 70,000 Telephone Expenses 30,000 Advertisement 75,000 Electricity - Otice 15,000 + Factory 30,000, Machinery Lost in Fire a 1,00,000 Depreciation - Plant and Machinery — 80,000 = Delivery Van 20.000 Income Tax vem im — | 1,20,000 Salaries sosssnesene | 250,000 Donations a 70,000 Establishment Expenses : 100,000) Rent of Showroom 65,000 Interest on Loan vo 45,000 Sale of Factory Scrap : 7.500 Dividend Received 17,500 Directors Fees aes 60,000 Mailing Charges of Sale Literature vo 10,000 Closing Stock - Raw Materials ao 1,85,000 ~ Finished Goods Other Information : (a) 60% of Telephone Expenses relate to Otfice and 40% to Sales Department. (©) Salaries to be allocated to the Factory, Otice and Sales Department in the ratio of 1: 2:1 (c) Establishment Expenses are to be apportioned equally between Office and Sales Department. (4) Sales are made to eam Profit @ 20% on Selling Price. (T¥.B.Com, Oct. 10, adapted) Solution : 30,000. COST SHEET ‘A. Direct Materials Opening Stock Purchases ‘Scanned with CamSeannerussification of Costs and Cost Sheets Carriage Inward Custom duty & Octroi Less: Closing Stock Direct Wages Direct Expenses (5; PRIME COST (Special Design Works Overheads Power Factory Rent Factory Electricity Depreciation on Plant & Machinery Factory Salaries Less : Sale of Scrap . WORKS COST G. Office/Administrative Overheads Office Rent Telephone Office Electricity Salaries Establishment expenses Directors fees H. COST OF PRODUCTION |. Finished Goods ‘Add: Opening Stock moos Less: Closing Stock J. COST OF GOODS soLD K. Selling & Distribution Overheads Advertisement Depreciation - Detivery Van Salaries Establishment expenses Showroom Rent Telephone Mailing charges L. TOTAL COST /COST OF SALES M. PROFIT (20% on S.P.) SALES lustration 9 : 295 20,000} 60,000 16,00,000} 1,85,000)| 14,15,000] 000) 50,000) |26,65,000 99,500} 70,000} 30,000} 80,000 62,500) 3,42,000] (7,500)} _3,34,500 }29,99,500 50,000 18,000) 15,000) 125,000] 50,000} 60,009] | -9.18,000 33,17,500 |—-30,000 33,47,500 (30,000) 33,17,500 75,000) 20,000) 62,500} 50,000 65,000} 12,000) 10.000) 2.94,500 36,12,000 9,03,000 35,15,000 From the books of accounts of Viburaj Enterprises the following details have been extracted for the War ended 31st March, 2014. Pertoutars z Comporat 114,10,000 Bete Pan wet SOR 1,27,500 weet aalton Raw Material fi500 92s for special equipment ‘ caanase of Raw Materials 24.928 hegre’? Inwards one otek Materials , | 238890 | eames 22,600 k bouraree Premium for stock of Raw Material ee Beurance Premium for computer a is00) Rpeninc® Premium for Delivery van aieod Goxng tock of Raw Materia! zene ale 99, StCk of Raw Material Faecal ‘aie 1,10,000 88 outward. ‘Scanned with CamSeanner296 Depreciation on Delivery van Depreciation on Computer Salaries to office staff Salaries to Drawing and Designing department Opening work in progress Closing work in progress Brand Ambassador Remuneration Direct wages - Skilled labour = Unskilled labour Cost of catalogue printing Opening stock of finished goods Closing stock of finished goods Repairs to Delivery van Other Information : 4. The corporate Manager's sala of 1:9, 2. Selling price is 120% of Cost Price From the above details prep: Solution : COST SHEET ELEMENT OF COST ‘A. Direct Materials Opening Stock Add: Purchases ‘Add: Carriage inwards Less: Sale of defectives Less: Closing Stock B. Direct Wages Skilled Labour Unskilled Labour ©. Direct Expenses Hire charges - Sp. Equipment D. PRIME COST E. Works Overheads Corporate manager salary (1/10) Rent of plant Indirect Material Insurance - raw material stock Salary - drawing & design Less: Sale of Scrap WAP. ‘Add: Opening Stock Less : Closing Stock WORKS COST G, Admin, Overheads Corporate manager salary (9/10) Office rent Office expenses Insurance - computer Depreciation - computer Salary - office staff Total Admn, OH H. COST OF PRODUCTION 1. Finished Goods ‘Add: Opening Stock Less: Closing Stock of Finished Goods J. COST OF GOODS SOLD ry tobe apportioned between the factory fare Cost Sheet showing various ' Cost Accounting (L¥.B.Com. : Spay SEM. 28.0 a@ on 15.39 185,14 9435 9559 48,66, 3.15 509 124.509 57509 6.49.05 7.50.09 35,509 and the office in the rt elements of cost. (TY.B.Com., Oct. 2012, adapted) a a 5,038,000 4,40,000 57,000 '10,00,000 4,11,000) 1,27,500| 2,35,600) 22,600 1,85,700| (16,800)} 94,300 (96,500)| 9,99,000| 84,700] 41,000 12,700 87,300] 1,15,300] ‘Scanned with CamSeannerqussification of Costs and Cost Sheets 297 x. SalesiDistr. Overheads insurance - delivery van Carriage outward 7 a Depreciation - delivery van "6.000 Remuneration - brand ambassador 4,80,000 Printing - catalogue "57,500) Repairs - delivery van 35,500) Total S & D OH "| 7.22.50 L._ COST OF SALES i36,15,900, yu. PROFIT [20% Of Cost] 7,23,180 n,_SALES [43,39,080, qustration 10 : (Hidden Information) From the following information, prepare a cost sheet for the month of December, 2014. tees Re, P| Sock on Hand - 1st Dec. 2014 Raw Materials 25,000 Work-in-Progress 8,200 Finished Goods 17,300 aw Materials consumed during Dec. 2014 21,800 Works Cost for the month (after adjusting work-in-progress) 48,400 ost of Production of Goods sold 53,200 | purchase of Raw Materials 21,900 ‘Camiage on Purchases 1,100 Sale of Finished Goods 72,300 Direct Wages 17,200 Direct Expenses 1,200 Factory Overheads 9,100 Administration Overheads See 3.200 Seling and Distribution Overheads cee 4.200 Solution : Cost Sheet for the Month of December 2014 STEP ELEMENT OF COST ‘A. Direct Materials Opening Stock of Raw Materials 25,000 | Add : Purchase of Raw Materials, 211900 | Add : Carriage on Purchases 11100 | . 48,000 Less : Closing Stock of Raw Materials (Bal. Fig.) (48,000 - 21,800) 26,200 Cost of Raw Materials consumed 21,800 B. Direct Wages 17,200 | © Direct Expenses 1,200 0. PRIME COST 40,200 E, Factory Overheads 9,100 Gross Works Cost 49,300 Work-in-Progess ‘Add : Opening Work-in-Progress 8.200 57,500 Less : Closing Work.in-Progress (Bal Fig.) (57,500 - 48,400) 9.100 WORKS COST a 48,400 Administrative Overheads 3200 COST OF PRODUCTION 51,600 Add : Opening Stock of Finished Goods 47300 68,00 Less : Closing Stock of Finished Goods (Bal. Fig.) (68,900 - 15.700 ‘COST OF GOODS SOLD eae 53,200 Solling and Distribution Overheads "4200 ‘Scanned with CamSeanner298 Cost Accounting (T.¥.B.Com, : SEM. L. COST OF SALES M. PROFIT (Bal. Fig.) N. SALES Note : Since closing stock of raw materials, work-in-progress and finished goods are not given j the question, they must be found as, ‘Balancing Figures’ at the respective stages in the cost sheet} using the extra information given like material consumed, works cost and cost of production of goods sold. RPM siae sd Ue lustration 11 : (Royalty, Works OH @ Machine Hour) Dunkel Ltd. Started a factory in Navi Mumbai on 1st April 2013. Following details are furnisheq about its activity during the year ended 31st March, 2014 : Raw Material consumed - 40,000 units @ % 7 per unit. Direct Wages :- (a) Skilled worker 2 9 per unit. (b) Unskilled worker % 6 per unit. Royalty (on raw material consumed) @ & 3 per unit. Works overheads @ % 8 per machine hour. Machine Hours worked : 25,000 Office Overheads at 1/3rd of Works cost. Sales Commission @ 4 per unit. Units produced 40,000. Stock of Units at the end : 4,000 units to be valued at cost of production per unit. Sale price is % 50 per unit. Prepare cost sheet showing the various elements of cost both in total and per unit. Solution : (SYBAF, Nov. 2017, adapted) DUNKEL LIMITED Cost Sheet For the Year Ended 31-3-2014 [Output : 40,000 Units) ‘STEP ELEMENT OF COST Total Cost] Units | Unit Cost z z No. z A. Direct Materials Raw Materials (40,000 x 7) 2,80,000 40,000 7.00 B. Direct Wages = Skilled Workers (40,000 x 9) 3,60,000 - Unskilled Workers (40,000 x 6) 2,40,000 | 6,00,000 40,000 15.00 ©. Direct Expenses Royalty on Raw Materials (40,000 x 3) |4,20,000] 40,000) 3.00 Py aa 110,00,000 40,000 25.00 . Works Overheads (25,000 x 8) |_2,00,000] _40,000] __5.00 F WORKS cost H12,00,000} 40,000] 30.00 Office Overheads (1/3 of Works Cost) |_4,00,000] __40,000] _10.00 H. COST OF PRODUCTION 16,00,000} 40,000} 40.00 1. Less: Stock of Finished Goods - 000 x 40) |_1.60,000} __4,000 J. COSTOF Goons soLD 14,40,000 Sales Overheads: - a ~ Sales Commission (36,000 x 4) 1,44,000] 26,000 L. COST OF SALES 15.84,000| 36,000 M. PROFIT 2.16.00] 36,000 L LES }18,00,000 36,000 tion 12, / HO» the following particulars prepare a Cost Sheet showing the cost per item and total cost per 10" period ended 31st March, 2018 : ‘Scanned with CamSeannerWater Supply Cost Sheet For the Ye ar ended 31st March, 2018 [Output - 15,000 tons] waterials #2 clive Wages yctvo Wag 35.000] Factory Insurance a Rent and Taxes 7's00| Legal Expenses to foo Lighting 2,200] Direct Expenses: as oo Fraory Heating 1,500] Rent of Warehouse 2,000 fr Powe! 4.400 | Depreciation of Plant & Machinery 000 Movlag® ag Wi 3.000| Depreciation on Office Building i prectors Fees « lorks 1,000| Depreciation on Delivery Vans ‘00 reo Fees - ice 2,000 Bad Debts 300 ery cleaning 500] Advertsing 500 ry Office Expenses 200} Sales Department, Salary 159 Story Stationery 750| Upkeep of Delivery Van ~~ > stationery 900] Bank Charges fa Se Tools Written Oft 600| Commission on Sales 1,500 wand Taxes - Office 500 jowe The total output forthe period has been 16,000 tons. (SYBAF, Feb. 2006, adapted) goution = Sie ELEMENT OF COST Total Cost Gost Per Ton f z qaaip sone PE A. Direct Material : Raw Material .. 33,000 2.200 | BL Direct Labour : Productive Wages . 35,000 2.333 | ¢. Direct Expense 3,000 D. PRIME COST 71,000 4,733 E. Factory Overheads : Unproductive Wages 10,500 0.700 Factory Rent and Taxes 7,500 0.500 Factory Lighting 2,200 0.147 Factory Heating 1,500 0.100 Motor Power 4,400 0.294 Haulage 3,000 0.200 Director's Fees (Works) 4,000 0.067 Factory Cleaning 500 0.033 Factory Stationery 750 0.050 Loose Tools written off 600 0.040 Water Supply 1,200 0.080 Factory Insurance 4,100 0.073 Depreciation of Plant and Machinery |__2.000| 36,250] __0.133]__2.417 WORKS COST eve 1,07,250 7.150 G. Office Overheads : Director's Fees (Office) 2,000 0.133 Sundry Expenses 200 0.013 Office Stationery 900 0.060 Rent and Taxes 500 0.033 Office Expenses 500 0.033 Legal Expenses 400 0.027 Penk Charges : [er 50 0.004 epreciation of Office Building o00|__s.s60|_ i COST OF PRODUCTION 7,12,800] oor =oara ' Sales Overheads : . Rent of Warehouse 300 0.020 Depreciation of Delivery Vans. ~ 200 0.013 Bad Debts . 400 0.007 Advertising 300 0.020 : 1,500 0.100 Sales Department Salaries ‘Scanned with CamSeanner300 Cost Accounting (LY-B.Com, : spy SEM. Upkeep of Delivery Vans 700 0.087 Commission on Sales 1,500] __4,600} __0.100 J. TOTAL COST 1,17.400 [—22y 2a \Uy W Illustration 13 : (Computing each Element of Direct Cost) Prepare a cost sheet showing the total and per tonne cost of paper ManulAclured BY Times p, | Pane Ld tor the month of March, 2014. There were 26 working days in the month, Alsg jas profit eamed by the company. The details are as under = Se Direct Raw materials: Paper pulp 6,000 tons @ % 900 tonne. Direct labour: 280 Skilled workmen % 250 per day 300 Semiskilled workmen 2 €150perday 470 Unskilled workmen 2 %100perday Direct expenses: Special equipments hire charges 3 12,000 per day _ Special dyes 2250 per tonne of total raw material input Work overheads: Variable 1 @50% of direct wages Fixed + %2,70,000 p.m. ‘Administration overheads @ 12% of works cost Selling and distribution Overheads = 80 per tonne sold. Opening stock of paper 500 tonnes valued @ < 2,501.60 per ton Closing stock of paper © 300 tonnes valued at cost of production. The paper is sold @ % 9,000 per tonne. Solution : TIMES PAPER MILLS LIMITED Cost Sheet For tho Month Ended 31-3-2014 STEP ELEMENT OF COST Cosine io ‘A. Direct Material = Raw Matenals (6,000 x 900) B. Direct Wages : + Skilled Workmen (280 x 250 x 26) = Semi-skilled Workmen (300 x 150 x 26) = Unskilled Workmen (470 x 100 x 26) C. Direct Expenses: = Equipment Hire Charges (12,000 x 26) = Special Dyes (250 x 6,000) D. PRIME COST E. Works Overheads - Variable (50% of Direct Wages) + Fixed WORKS COST G. Administrative Overheads H. 1 nm 42,12,000 —18,12,000 1,14,24,000 —23,76,000 1,38,00,000 —16.56,000 1,54,56,000 1250800 1,67,06,800 772,800 1,59,34,000 (12% of Works Cost) COST OF PRODUCTION ‘Add: Opening Stock of Finished Goods (600 x 2,501.60) J. Less: Closing Stock of Finished goods (800 x 2,576) K. COST OF GOODS SOLD L. Selling & Distribution O/H (80 x 6.200) M. COST OF SALES eee. N. PROFIT 1,64,30,000 0. SALES —21.70,000 1,86,00,000 ‘Scanned with CamSeannerpation af Coss and Cont Sheet so! “ne rato for Equipment hiro chargos on yee me for 26 woking dye es has been given on par day bass, Hence may nave PO erator 14: (Dual Pricing) 44d) ‘rie covert ried onc See Sugar Ly manutacture ra oe ne our shouldbe sold to the State ‘Government at @ ateetnpte Elance Orca neyo 987" Esper set Si" ho yor andes 2H ihe year 3,600 tons Sugarcane was consumed @ @ 1,000 per fon : nytt pouraMfoun 2 ¥ gbouF aMfounted 10 @ B25 per ion of sugar produced and sell sugar with a ‘controviad price of Fottowing are pre setals of other expenditure are as follows :- us @ rect Expenses - 4,20,000 seepnone Charges | 352.695 fice computer purchased oe 2,75,350 factory Rent and Insurance - 7 3,54,760 tannery purchased nae 425,560 hcninery Repairs : 98,847 tammission on Sales 9,37,650 racory Salaries 2.19,588 ‘camage Outward 1,54,090 packing Expenses 194,450 spank interest 1,65,895 factory Electricity 2,61,880 pelvery Van Expenses 1,06,850 Coal Consumed 3,80,125 Depreciation on Machinery . | 2,49,600 ‘depreciation on Computer 2,04,180 Depreciation on Delivery Van 1,57,360 Ofice Salaries . 1,89,325 . 1,13,000 Printing and Stationery During the year 2,400 tons of sugar Was get for the year produced. The Company's Profit ta for fixing the open market sel Been 10% ofits average paid-up Cantal of % 1,42,56,000. Prepare cost sheet and find various ‘components of total cost ‘and per unit cost and suggest the Seling Price for Open-Market. {7 ¥.B.com, April 2000, SYBAF, Oct. 2012, adapted) \ sling price on the basis of cost Solution : SWEET SUGAR LIMITED Cost Sheet For the Year Ended 31st March 2014 [output : 2400 Tons] STEP ELEMENT OF COST Total Cost ugarcane Direct Material : Direct Labour Direct Expense PRIME COST Factory Overheads = Factory Rent Coal Consumed Factory Salary Machinery Repairs aed Electricity 5, Machinery Depreciation _ 68: "WORKS COST aise ‘Scanned with CamSeanner302 Cost Accounting (T.¥.B.Com. : Spy My G. Office Overheads Salary Ee Printing and Stationery x Telephone 3,52,695 Depreciation on Computor 204,100} 0,59,200| 2.400] 5 H. COST OF PRODUCTION 184,24,000| — 2,400) asi 1. Sales Overheads : Commission 3,97,650 1,54,090 Carriage Outward Packing Expenses Delivery Van Expenses Depreciation on Vans J. COST OF SALES 10 | _9,50,400 2,400 193,74,400] 2,400 : 3000) 28,80,000) _9e0] Less : Sold to Govt. (960 tons x z oe sa-94°400 740] 14,25,600 a K, PROFIT (10% of & 1,42,56,000)..... L,_ SALES (Open Market) '79,20,000} 1,440] istration 15 : (Working back sales) Following details are furnished by K.K. Ltd. of expenses incurred during the year ended 31st March 2014. Particulars a Direct wages 1,10,000 Purchases of Raw materials 2,40,000 Factory Rent 35,000 Cost of Catalogues 17,100 ‘Sundry Expenses 18,500, Depreciation on Plant and Machinery 19,000 Opening stock of Raw materials 25,000 Repairs to office furniture 12,500 Carriage outwards 25,650 Interest on Loans 12,700 Closing stock of Raw materials 15,000 Distribution of Free samples 13,775 Audit Fees 11,500 Demonstration Expenses 13,300 Furniture Loss by Fire 8,000 Indirect Materials 26,000 Office Salaries 27,500 Store keeper's salary 9,000 Depreciation on Office Equipments 10,000 Commission of Sales 15,575 Direct Expenses 90,000 Material Handling Charges 11,000 Machinery Purchased : 440,000 Other Information : (a) Stock of finished goods at the end 500 units to be valued at cost of production. (b) Number of units sold during the year were 9500. (c) Profit desired on sales is 20% Prepare Cost Sheet showing the various elements of cost both in total and per unit and also find 2 ca ore and per unit profit. (TY.B.Com., April 2010, adapt? COST SHEET ‘BiEP ELEMENT OF COST 2H Direct Opening Stock of Raw Materials Purchases of Raw Materials ‘Scanned with CamSeannerification of Cost classifi Sand Cost sy, ets Less : Closing Stock of Net Direct Materials M@toriats ue . Direct Wages | (15,000) | b pirect Expenses 2.50,000] 10,000 25.00 p. PRIME COST 110.0001 10,000] 1.00 ” 10,01 g. Works Overheads baseee} 12000] 9.00. Factory Rent |-*:59,000) 10,000[ 45.00 Depreciation - Plant g Indirect Materials M*hinory 48.000) 10.000) 3.50 Material handing Cha, 000} 10,000 1.90 é ‘ages 26,000| 10,000 2.60 Store Keeper's Salary 11,000] 10.000} 4.10 Total Works OW 9,000] 10,000 0.90 — WORKS COST 1,00,000| 10,000! 10.00 6. Admin. Overheads 5,50,000| 10,000[ 55.00" Sundry Expenses [ Repairs to Office Fumiture 18,500} 10,000 1.85 Audit Fees 12,500 10,000 | 1.25 Office Salaries 11,500 10,000 1.15 Depreciation- Office E 27,500} 10,000) 2.75 Total Admn. OH tUPments 10,000} 10.000] 1.00 80,000} 10,000 8.00 |. COST OF PRI . : on ia ean 6,30,000] 10,000 63.00 1. Less: Closing Stock of Finished Goods : (37,500)] — (600)| 63.00 |. COST OF GOODS soLD 3,98,500| 9.500) 63.00 K. Sales/Distr. Overheads Cost of Catalogues 17,100] 9,500 1.80 Cartiage Outward 25,650| 9,500 2.70 Distribution of free samples 13,775 9,500 1.45 Demonstration Expenses 13,300, 9,500 1.40 Commission on Sales 15,675 9,500 1.65, Total S & D OH 85,500 9,500 9.00 L. COST OF SALES 6,84,000| 9,500] 72.00 M. PROFIT (25% on Cost) 1,71,000 9,500 18.00 N. SALES 8,55,000| _9,500[ 90.00 Note : Financial items - Interest on Loan, Furniture lost by fire, Machinery purchases are to be 'gnored. Mustration 16 : . ring th ded 31st March, Folowing details are furnished by MBA Ltd. of expenses incurred during the year ende ana Peniout < Di Be 3,40,000 "ect Material 85,250 pening Stoct hed Goods (1,000 units) “ 19 Stock of Finishe’ ‘G00 units) ing Stock of Finished Goods (2 96,000 ‘feciation on Plant and Machinery 17,500. 88 on Sale of Machinery 85,500 lade Fair Expenses 160,000 Diect Expenses 3.89.000 Salary 6 peannoers 2,60,000 1185.250 1,72,000 54,000 ‘on Computers , enses 1,90,000 Bestonina Exp 144000 Scanned with ComScanner304 Cost Accounting (1.¥.B.Com. EMV Office Maintenance Charges 1 Factory Rent : fea Sales (19,000 Units) 22.20.69 Closing Stock of Finished Goods to be valued at Cost of Production You are required to prepare Cost Sheot showing various elements of cost both in total and por un and also find out Total Profit and Per Unit Profi Solution : (TY.B.Com., March 2011, Oct. 2014, SYBAF, March 2018, adaptog) Cost Sheet ats [Rate Per) Tota Unit £ z 20,000] 17.00) 3.40.00 20,000] 13.00] 2.69.00 20,000| _8.00|_1.60.000 20,000] 38.00] 7.60.09 STEP ELEMENT OF COST ‘A. Direct Materials B. Direct Wages C. Direct Expenses D. PRIME COST E. Works Overheads Depreciation - Plant and Machinery Drawing and Designing Expenses Factory Rent Total Works Overheads F. WORKS COST 20,000 4.80] 96,000 20,000 2.70) 54,000 20,000 '50| 1,50,000 20,000{ _ 15.00] 3.00.00 20,000 53.00] 10,60,000 G. _Office/Administrative Overheads General Manager's Salary 20,000] 19.00} 3,80,000 Depreciation - Office Equipments 20,000 8.60] 1,72,000 20,000 9.40] 1,88,000 Office Maintenance Total Administrative Overheads H. COST OF PRODUCTION 20,000] 37.00] 740,000 20,000] 90.00] 18,00.000 |. Finished Goods ‘Add: Opening Stock 85.25] 85,250 Less: Closing Stock 90.00 |(1,80,000) J. COST OF GOODS SOLD 05,250 K. Selling & Distribution Overheads Trade Fair Expenses ~ 4.50] 85,500 9.75] 1,85,250 Advertisement Depreciation - Delivery Van Total Selling & Distribution Overheads. L. TOTAL COST/ COST OF SALES M. PROFIT N. SALES Notes 1. peameel Items - Loss on Sale of Machinery, Dividend Paid, Machinery Purchases are t0 °° 2. Drawing and Designing Expenses are treated as Works Overheads as per CAS-4. 6,00] 1,14,000 20.25] 3,84,750 110.00 |20,90.000 10.00] 1,90,000 120.00]22,80,000 ant 7: oe delails are funished by NY Ltd. of Expenses incurred during the year ended 31st March, Particulars 7 Salesman Salary 47.500 Opening Stock of Finished Goods (2000 units) 7,60,000 Director's Fees 700 Indirect Wages 976.300 Repairs to Office Furniture 4,01,700 Works Managers Salary 11,94,700 ‘Showroom Expenses 10,68,750 Scanned with CamScanneruassification of COStS and Cost Sheer 4 Shee eprecation on Computer ms eect Materials ation on Plant and Machin “Tatoo sverisoments "y : | 731/900 eae “ 47,100 on, vs 15,99(750 pect Materials a 7:91:70 ns epence ~ |1a.92'400 losing Stock of finished goods (3000 units) 7 a ‘ther Information : ° - 4, Closing stock of finished goods t 2 Prom desired on sales is 20%, MRM Ast of peducton ‘3. Number of units sold during the year was 25,000. repare Cost Sheet showing the various ele pe ot pret and per unt prt forthe year ended Stat March 2014 na sunndont solution : (LY.B.Com., Mar. 12, adapted) COST SHEET ELEMEN: i IT OF COST Total |_Units_[ Rate Per Unit I 7 7 a ea z e ‘A. Direct Materials 18,82,400 82, 26,000 72.40, 8. Direct Wages 110,01,000 26,000 38.50 Cc, Direct Expenses 4,96,600 26,000 19.10 D. PRIME COST {33,80,000 130.00 £. Works Overheads Indirect Wages 9,76,300 26,000 37.55 11,94,700 26,000, 45.95 Works Manager's Salary Indirect Materials 7,31,900 26,000] 28.15 Depreciation - Plant & Machinery |_4,77,100 26,000] __18.35 Total Works Overheads [s3,80,000] 26,000 130.00 [67,60,000| 26,000 260.00 F WORKS COST G. Office/Administrative Overheads, Director's Fees 9,73,700 26,000 Repairs - Office Furniture 4,01,700 26,000 Depreciation - Computer 12,12,900 26,000 Office Salaries |_7.91,700 26,000 Total Administrative Overheads ls3,80,000) 26,000 130.00 H. COST OF PRODUCTION 1,07,40,000] 26,000 "390.00 1. Finished Goods ‘Add: Opening Stock 7,¢0,000] 2000] Less: Closing Stock (11,70,000)] (3,000) . J. COST OF GOODS SOLD |97,30,000] 25,000. 389.20 K ition Overheads Sings seamen way] | alm 68,750 5,04 Showroom Expenses smc oon] 295] Total Selling & Distribution foze0.c00} 26 L. “TotaL cosT/ COST OF SALES F;29,60,000} 25,000 M. PROFIT (25% of Cost] [52.45,000) | 25,000 SALES 6225000] 25,000 Note ; 5 = Opening Stock Direct production + Closing Stock Material Units = 5000 + 9,000 ~ 2,000 = 26.000 Scanned with ComScanner306 Cost Accounting (T.Y.B.Com. : SE; Mlustration 18 : y From the details given below, prepare a comparative cost sheet for the first and second halt of thy year 2014, showing cost por unit in each case, at all stages. Particulars 7) 2-14 Direct Materials Consumed soe| | 700m ee 10,000] 12.909, Chargeable Expenses Yerooo| 20% Depreciation of Factory Machines $8000) 20.000 Indirect Wages in Factory eos] | 2a0ee Rent : Factory a.000 as Office 2 8.006 Tepers 6,000} 4.99 add 9,000] 2009 or 16,000] 20.009 Sundry Office Expenses capool Nae Output during the period in Units nora) aie Solution : Cost Sheet For the Year Ended 31-12-2014 Half year ended | Half year ended 30-6-14 31-12-14 ‘STEP ELEMENT OF COST 20,000 Units 25,000 Units Total | PerUnit| Total | Per Unit z z Tons z ed 50,000! 2.50] 70,000[ 2.80 ‘A. Direct Material Consumé Sa.00] 250] 70.000] 280 B. Wages . 0,000) 320 C. Chargeable Expenses 40,000] 0.50] _ 12,0 D. PRIME COST 1,20,000| 6.00] 1,62,000[ 6.48 E. Factory Overheads : » Depreciation of Factory Machines 16,000] 0.80] 20,000] 0. Indirect Factory Wages 20,000] 1.00] 30,000] 1.20 Factory Rent 5,000] 0.25] 4,000] 0.18 Factory Repairs 6,000] 0.30] 4,000] 0.18 F. WORKS COST 1,67,000[ 8.35] 2,20,000] 880 G. Administration Expenses : j Office Rent 8,000) 0.40] 8,000] 0.32 Office Repairs 9,000 0.45 2,000 0.08 Sundry Office Expenses 16,000 0.80] 20,000} 0.80 H._COST OF PRODUCTION 2,00,000] 10.00] 2,50,000[ 10.00 Wlystration 19 : ‘llowing details are furnished by Deepak Ltd. of expenses incurred during the year ended 3131 March, 2014 Particulars t Direct Material 3.40000 Opening Stock of Finished Goods (1,000 units) 85,250 Closing Stock of Finished Goods (2,000 units) ; Depreciation on Plant and Machinery 96.00 Loss on Sale of Machinery 17300 Demonstration Expenses 888 Direct Expenses 1.80000 General Manager's Salary 3,80. ‘Scanned with CamScannerclassification of Costs and Cost Sheets 307 widend Paid pirect Wages 7,800 Works Managers Salary wee 200,000 advertisement eo ',09,000 pepreciation on Computers . 85,250 purchase of Machinery 5 1.72,000 opreciation on Delivery Van “ 1.00.00 fice Maintenance Charges eee (Other Factory Overheads 5B aa ae Goodwill written off oo 122,80,000 gales (19,000 Units) Closing Stock ef Finished Goods to be valued at Cost of Production. You are required to prepare Cost Sheet showing various elements of cost both ni and also find out Total Profit and Per Unit Profit ens pon tal and perunt (TY.8.Com, Oct. 14, SYBAF, Mar. 18, adapted) Solution : Deepak Ltd. Cost Sheet For the Year Ended 31st March 2013 [Production : 20,000 units] ELEMENT OF COST Total Cost Per Unit ea uaa Re z ‘A. Direct Material 3,00,000 15.00 B. Direct Wages 2,00,000 10.00 ©. Direct Expenses 1,60,000 8.00 D. PRIME COST 6,60,000 33.00 E. Factory Overheads : Depreciation on Plant and Machinery 96,000 4.80 Works Manager's Salary . | 100,000 5.00 Other Factory Overheads 204,000 10.20 4,00,00 20.00 F WORKS COST 10,60,000 ‘53.00 G. Office / Administration Overheads : General Mangers Salary 3,80,000 19.00 Depreciation on Computers 4,72,000 8.60 Office Maintenance Charges |_1,88,000 |__9.40 }.2.40,000 37.00 H. COST OF PRODUCTION H8,00,000 90.00 1. Add : Opening Stock of Finished Goods 85,250 85.25 (1,000 units) J. Less : Closing Stock of Finished Goods {1,80,000) |__ 90.00 (2,000 units @ % 90 per unit) Kk. COST OF GOODS SOLD 17,05,250 89.75 L. Selling and Distribution Overheads Demonstration Expense 85,500 4.50 Advertisement 4,85,250 9.75 Depreciation on Delivery Van |_1.14,000 |__6.00 3,84,750 20.28 MM, TOTAL COST/ COST OF SALES [20,90,000 110.00 ‘. PROFIT | 1.90,000 |____10.00 L._ SALES / SELLING PRICE (19,000 units) [22,80,000 120.00 Units sold out ‘Opening Stock + Production ~ Closing Stock 19,000 units 4,000 units + ? = 200 units Production = 20,000 uni Won 02,” . Folowing partevlar have been extracted for tho year ended 31st March, 2016 frm the books of ‘M/s Ashwin Manufacturing Co. Ltd. Scanned with CamScannerCost Accounting (T.Y.B.Com, chase of Raw Materials Direct Wages. Ottice Satarins Carringo tnwvards Catriage Outwards Sales Opening Stock - Raw Materials 'ed Goods (6,000 Units) Work-in-Progress Travelling Expenses Interest on Capital Advertising Power Income Tax Agent's Commission Plant Maintenance Rent and Lighting (9/10th for Factory) Rent Received Rent of Warehouse Sundry Expenses - Factory + Office Building Repairs (1/10th for Office) Manager's Salary (for Factory & 12,000) Depreciation on - Plant - Factory Building + Office Building Sale of Scrap Closing Stock of Raw Materials & 1,95,000 and Work-in-Progress & 78,000. During the year 1.50,009 units were produced out of which 7,000 units remained unsold, Prepare Cost Sheet and show the total and per unit cost and total profit and per unit profit eared, Solution : (L¥.B.Com., Oct. 2015, adapted) M/S ASHWIN MANUFACTURING CO. LTD. Cost Sheet For the Year Ended 31st March 2015, [Production : 1,50,000 units] ‘STEP ELEMENT OF COST Total Cost z ‘A. Direct Material Raw Materials Consumed : Opening Stock of Raw Materials... 41,80,000 ‘Add : Purchases : 4,95,000 3.30 Carriage Inwards : 3,000 0.02 Less : Closing Stock of Raw Materiais {1.95,000) 4.30) Raw Materials Consumed 00 at B. Direct Wa ms) | 22 C. PRIME Co: 8,01,000 se D. Factory Overheads : Power 10,500 0.07 Plant Maintenance ne 37,500 0.25 Rent and Lighting (9/10th for Factory) 94,00 0.63 Sundry Expenses 43,500 0.09 Building Repairs (9/10th for Factory) 94/800 nea Manager's Salary 12,000 0.08 Depreciation on Plant one! 19,500 0.13 Depreciation on Factory Building 7,600 005 ‘Scanned with CamSeanneraasifiation of Coss and Cost Sheets 309 Less : Sale of Scrap ‘Add : Opening Stock of Work-in-Progross 4500) v oe) Add: Gosing Stock ol Workin Phones | 78,000) ine FACTORY / WORKS Co: 2,73,000 | rl office Deerhanda ‘aan 10,74,000 Office Salaries . Rent and Lighting (1/10th for Office) bert) Gor Sundry Expenses ce ot Building Repairs (1/10th for oce) 40,500 0.07 Manager's Salary ioisou gor Depreciation on Office Building... 9000 0.06 G. COST OF PRODUCTION li2.3. AL Add : Opening Stock of 1284-800 Finished Goods (6,000) 44910 1, Less : Closing Stock of Finished Goods (7,000 units @ £8.23 per unit) | (57,610) J. COST OF GOODS SOLD 12,21,800 8.20 Carriage Outwards 2,80,120 4.88 Travelling Expenses 11,920 0.08 Advertising 29,800 0.20 ‘Agent's Commission 46,190 0.31 Rent of Warehouse 5,960 0.04 |_3.73,990 1 k. COST OF SALES 5,905,790 10.71 L. PROFIT |__4,210 |__0.03 M. SALES 16,00,000 10.74 ilustration 24 : Bharat Electronic: the year ending 31st March 2016 = Raw Materials Opening Stock Purchases Closing Stock Custom Duty Dire Mar Direct Wages Chargeable Expenses forks Manager's Salary Haulage Charges Loose tools written off Sul 7 . Cost of Rectification Otfice Overheads 10% Selling Expenses & 4 per unit Finished Goods : Opening Stock Produced during the year Closing Stock Profit desired on cost 25% Prepare Cost Sheet showing !ne ‘of works overheads sold val ‘otal profit and per unit Prof rious elements of cost both i 1,000 Units (& 1,59,920) 10,000 Units. 2,000 Units in total and per (T.Y.B.Com., Nov. 2016, Vio a standard product and provides you the following information for 1,00,000 8,45,000 40,000 5,000 2,00,000 1,00,000 10,000 20,000 1,65,000 5,000 unit and also find out dapted) Scanned with CamScanner4 310 Cost Accounting (T¥.B.Com. : Spy SEM, Solution : BHARAT ELECTRONICS LTD. Cost Sheet For the Year Ended 31st March 2016 [Production : 10,000 units and Sold : 9,000 units} Total Cost STEP ELEMENT OF COST A. Direct Material Raw Materials Consumed : Opening Stock of Raw Materials Add : Purchases : Custom Duty E Less : Closing Stock of Raw Materials Raw Materials Consumed B. Direct Wages C. Chargeable Expenses D. PRIME COST E. Factory Overheads : Haulage Charges Loose Tools written off Works Manager's Salary Cost of Rectification | 0.50 2,00,000 | 20.09 FACTORY /WORKS COST... H14,10,000 141.00, Office Overheads (10% of Factory O/H) | 20,000 } _2.00 COST OF PRODUCTION oo ''4,30,000 143.00 ‘Add : Opening Stock of Finished Goods (1,000 units)... a. + 1,59,920 J. Less : Closing Stock of Finished Goods (2,000 units @ @ 143 per unit) (2,86,000) 143.00) kK. COST OF GOODS SOLD 13,03,920 148.8 L. Add : Selling Overheads @ 4 per unit sold) | 36,000 0 M. COST OF SALES 73,39,920 748.88 N. PROFIT (25% on Cost) 3,34,980 |__32.22 H16,74,900 186.10 0. SALES eee ee) Illustration 22 : (Working back sales) M/s. Vishal Manufacturing Company manufactures two types pf products viz. Aand B. The informats” for the year ended on 31st March, 2014 is as under. Particulars Direct material per unit Direct labour per unit Direct expenses per unit Additional information : (1) Factory expenses are charged at 20% of prime cost. (2) Office expenses are charged at 25% of works cost. (3) 2,000 units of product A were produced of which 1,500 unit its of P08” B were produced of which 4,500 units were sold. Ee Scanned with CamScanneryr cuassification of Costs and Cost Sheets goling expenses are 8 15 por Ky company charges a profit at 20% on g fre a cost sheet showing the cost an rep solution © UNI or product A and & 20 per unit for product B. ales for both the products. \d profit in total as wall as in per unit, aut (SYBAF, Oct. 2016, adapted) MWS VISHAL MANUFACTURING COMPANY Cost Sheet For the Year Ended 31-3-2014 PRODUCT A PRODUCT B EMENT OF COST| Working] Total] Units Working | Total | Units | Unit Gost Cost Cost , < z No. zg z No | @ {rect Materiais | 100x2,000] 2,00,000] 2,000] 100.00] 120*5,000| 6.00.00] 5.000] 120.00 s.orect Wages || 60x2,000| 1.20.00] 2,000] 60.00] Soxs.000| 2.50.00] 5.000} $9 08 € vest Expens 2,000] _'g0,000] 2,000] _40.00] 80x5,000| _4,00,000] 5.000] __20,00 2. roy Overheads 00.00] 2000] 200.00 7250.000] 5.000] 250.00 7 ‘000 (20% of Prime Cost) cee 250,000} 5.000 50.00 FE eo oe 4,80,000] 2,000] 240.00 15,00,000] 5,000] 300.00 6 office Overnea 1,20,000] 2,000] _60.00 '3.75,000] 5,000} _75.00 (25% of Works Cost) : 4H. COST OF PRODUCTION 6,00,000 300.00 18,75,000 375.00 Less: Closing Stock a Finished Goods } 300x500] _1,50,000] 500 375x500] _1,87.500] 500 | COST OF GOODS SOLD 4,50,000] 1,500] 00.00 16,87.500| 4,500] 975.00 4. Seling Overheads | 15x1,500| 22.500] 1,500] _15.00] 20 x¢,500] 90.000) 4.500} 20.00 K. COST OF SALES 472,500] 315.00 77.77.50 395.00 L PROFIT (20% on Sales = 25% on Cost) _1,18,125] 1,500] _78.75 |_ 4.44375] 4,500} _98.75 MLSALES 90,625] 1,500] 393.75 22,21,875| 4.500 493.75 llustration 23 : (Using Equations f Ws. Vidya Pen Company manuf forthe year ended 31st March, 2 Drect Material Direct Wages Direct Expenses ‘Total Sales. There was no work-in-progress at that - 1) Direct Material per unit in “Sharad £2) The Direct Wages per unit for {) Direct Expenses were same '§) Factory Overheads were 20% '5) Administrative Overheads were ‘2,500 units of Sharada Pen wer ich 4,0 6 per unit for Shi jarada Pen was statornent 5! a Pen were produced of w! } Seling Overheads were *) Seling price per unit for Sh nate required to prepare & ‘ttada Pen and Viveka Pen: er vive jor Cost Allocation) factures two types of pens "Sharada" and 1014 were as follows : of the prime cost. 50% of Direct Wages. e produced of which 2,000 were sold and 5,000 units of Viveka 100 were sold, during the year. ‘arada Pen and @ 9 per unit for Viveka Pen. *Viveka*. The particulars 75,000 10,00,000, he beginning or at the end of the year. On the study itis ascertained 1a Pen’ consists twice as much as that in type “Viveka Pen” ‘eka Pen” were 40% of those for “Sharada Pen”. + unit for Viveka as well as Sharada Pen. 250 and Viveka Pen was ¢ 125 respectively. howing cost and profit in total as well as per unit for ‘Scanned with CamSeannerSharda Pen Viveka Pen — ELEMENT OF COST Produced : 2500 units Produced : 5000 uni Sold : 2000 units Sold : 4090 Units Total Cost] Units [Unit Cost | Total Cost Units | Unit aaa z No. @ & No. a A. Direct Material (Note 1) | 2,50,000| 2,500 100 250,000] 5,000 Pr B, Direct Wages (Note 2) 1,25,000] 2,500 50] 1,009,000] — 5,900 a C. Direct Expenses 25,000] __ 2,500 __10] __ 50,000 5,000 fA D. PRIME COST 4,00,000} 2,500 160| 4,00,000] 5,000 a E. Factory Overheads _'g0,000] 2.500] | __32) 80.000] __5,000 ia F. WORKS COST 4,80,000] 2,500 792| 480,000] 5,000] ag G. Administrative Overheads | _ 62,500] 2,500] __25] __50,000] 5,000) __1g H. COST OF PRODUCTION | 5,42,500] 2,500 217| 5,30,000} 5,000 108, Less : Closing Stock of Finished Goods 1,08,500 _--| 106,000] 1,000} _.. 1. COST OF GOODS SOLD | 4,34,000 217| 4,24,000} 4,000 105 Selling Overheads 16,000 ___8] 36,000] 4,000} _g J. TOTAL COST 4,50,000 225| 4,60,000] 4,000 115 K. PROFIT 50,000 __25] __40,000 } __ 4,000 10 L. SALES '5,00,000 250| 5,00,000] _4,000 125 Notes : (1) Calculation of Direct Material Let the cost of material per unit in Sharada be 2m. Let the cost of material per unit in Viveka be m. s,m (5,000) + 2m (2,500) = 5,00,000 10,000 m = 5,00,000 m=50 :. Viveka = @ 50 per unit Sharada = @ 100 per unit (2 x 50) (2) Calculation of Direct Wages Let direct wages per unit in ‘Sharada’ be w. «Direct wages per unit in ‘Viveka’ = 40% of @ w = 0.4w w (2,500) + 0.4 w (5,000) = 2,25,000 2500 w + 2000 w = 2,25,000 4500 w = 2,25,000 w= 50 ; Wages in Sharada = % 50 per unit Wages in Viveka = % 20 per unit (40% of % 50) (3) Direct expenses per unit of production remain the same. % 75,000 + 7,500 units = & 10 per unit for both pens. Mlustration 24 : (Rectification of Defective Work) Tv sels Super Vision Company furnishes you with the following information about its 1000 manufactured and sold during the year : Materials Direct Wages Power and Stores 2,40,000 | Sale of Scrap Scanned with CamScanner 8,00,000 | Office and Administration Expenses] 6: 10,00,000 | Selling & Distribution Expenses 30,000 1,20,000 "40,000313 ification of Costs and Cost Sheets classi | Wages wooo Lighting 8,00,000] Sale of 1000 TY sets 52,00,000 1,20,000 | Rope f ectitying defect Jepairn and depreciation o oe weve 60,000] Machinery 2,00,000 oat por unit. Prepare also the re the cost sheet for the above yeai o year, show vents of © 4) Materials col and direct wages cost will increase by 10% and 15% respectively. 2) Factory oe Js will be recovered as a percentage of direct wagas, as last yaar {jofice everhends and! seling overhoads wil be recovered as percentage of works cost. ear, and @ 1500 TV sets will be produced and sold at 2 6,600 each in the next year. olution : (L¥.B.Com,, April 2002, SYBAF, Oct. 08, Feb. 09, adapted) prep imate 6 last Cost Sheet For the Year Ended ..... [Units Produced / Sold : 1,000] Note | Total Cost] Per Unit @ greP ELEMENT OF COST Direct Materials Direct Wages PRIME COST [A + B] 28,00,000 Dp. Works Overheads 1 _8,80,000 £, WORKS COST [C+D] '36,80,000 F._ Office and Administration Expenses _6,80,000 COST OF PRODUCTION [E + F] “43,60,000 #1, Selling and Distribution Expenses 1, COST OF SALES 4,480.00 J. Profit [K - I] 1,720.00 K._SALES 6,200.00 Estimated Cost Sheet For the Year Ended [Units Produced / Sold : 1,500] STEP ELEMENT OF COST Note | Total cost] Per Unit No. z R 2 29,70,000 1,980.00 3 _17,25,000 | 1,150.00 46,95,000| 3,130. 00 4 | 45.18,000} 1,012.00 62,13,000 4,142.00 5 11,48,054 | _765.37 73,61,054 4,907.37 6 | 202598] _135.08 75,63,652| 5,042.43 _23,36,348 | 1,557.57 '99,00,000} 6,600.00 Direct Materials Direct Wages PRIME COST [A + B] Factory / Works Overheads WORKS COST [C + D] Office Overheads COST OF PRODUCTION [E + F] Selling Overheads Cost OF SALES IG + H] xerzPmMpOeP Profit SALES [kK - 1] Working Notes : (1) Works Overheads z Power and Stores 2,40,000 Indirect Wages 3,00,000 Factory Lighting 1,20,000 Repairs and Depreciation of Machinery 2,00,000 Cost of Rectifying Detective Work 60,000 9,20,000 Less : Sale of Scrap —40,000 -8,80,000 ‘Scanned with CamSeanner34 Cost Accounting (T¥.B.Com. : SE. (2) Direct Materials Cost per unit will rise by 10% Cost per unit previous year ‘00 Rise by 10% ar Increased Cost ay (3) Direct Wages Cost per unit will ise by 15% Cost per unit previous year 1.000 Rise by 15% rr. Increased Cost tts (4) Works Overheads Taken as a percentage of Direct Wages Total cost of work overheads previous Yea! , +5491 cost of Direct Wages current year Total cost of Direct Wages previous year 8,80,000 = =~ x 17,25,000 = 15,18,000 70,00,000 * 17" (6) Office Overheads Taken as a percentage of Works Cost _ Total cost of office overheads previous Year , rota1 Works Cost current year Total Works Cost previous year = 8:80.00. 62,13,000 = 11,48,054 36,80,000 (6) Selling Overheads Taken as a percentage of Works Cost eee x 62,13,000 = 2,02,598 Ilustration 25 : (Changes in OH Rates) In respect of a factory the following figures have been obtained for the year 2013 : : Cost of Materials 12,00,000 Factory Overheads 6,00,000 Selling Overheads 4,48,000 Distribution Overheads 2,80,000 Direct Wages 10,00,000 ‘Administrative Overheads 6,72,000 Profit 8,40,000 A work order has been executed in 2014 and the following expenses have been incurred: Materials % 16,000 and Wages @ 10,000. ‘Assuming that in 2014 the rate of factory overheads has increased by 20%, distribution overheads have gone down by 10% and selling and administrative overheads have each gone up by 121%. at what price should the product be sold as to eam the same rate of profit on the selling price a5!" 2013? Factory overheads are based on direct wages while all other overheads are based on factoY cost. (LY.B.Com., Oct. 2002, adapted) Solution : Cost Sheet For the Work Order Executed in 2014 ‘STEP ELEMENT OF GOST ‘A. Direct Matenals B. Direct Wages ¢. PRIME COST D. Add : Factory Overheads (WN 3) E. WORKS CosT Add : Administrative Overheads (WN 4) G. COST OF PRODUCTION wo ‘Scanned with CamSeannerF EEE usification of Costs and Cost Sheen Sheets add : Sales / Distribution Overhong HS orhoads H+ Selling Overheads (WN 5) Distribution Overheads (\ 1, COST OF SALES we) Cam |, Add : Profit (1/5th on — 2 sates Cost of Sales) Foe product should bo Sold for & 61,35 61.954 3 rAd Le. 6th on sales .954 to eam the same rate of profit on the selling price as in the working Notes = ) Cost Sheet For the Year 2013, Se ELEMENT OF COST ‘n._ Direct Materials ¢ £ B. Direct Wages “eam 12,00,000) ¢. PRIME COST - 10,00,009) coo D. Add : Factory Overheads cama 20 —. WORKS COST ack ,seoon fF Add: Administrative Overheads _ ‘ COST OF PRODUCTION aera 09 ‘Add : Sales / Distribution Overheads Selling Overheads 4,48,000| Distribution Overheads 280,000} _7,28,000 1, COST OF SALES " (42,00, 600 J. Add : Profit 2,40,000 K._SALES 50,40,000 {2) Calculation of Percentage of Profit Cost of Sales . 42,00,000 Profit 8,40,000 Sales 50,40,000 840,000 499 :. Profit as a percentage of sales 0,40,000 x 100 16.67% or 1/6th on sales or 1/50n cost of sales (3) Calculation of Factory ‘Overheads (Based on % to Direct Wages) %.6,00,000 aan Rate of Overheads in the year 2013 = ¥10,00,000 x 100 = 60% Rate of Overheads for the year 2014 = 60% + 20% of 60% = 72% on direct wages = 72% x ¥ 10,000 = 7,200 (Based on % to Factory Cost) €6,72,000 . nto Factory Cost = %28,00,000 x100 = 24% . Factory Overheads (4) Calculation of Administrative overheads Rate of Overheads as a proporio’ +. Administrative Overhaads for he Year 2014 3900 24% = 27,908 @ 24% on Factory Cost = 3 Trae +. Administrative Overheads [OF 2014 = Hon + 12.5% of € 7,968 actory Cost) © 4,48,000 _ — x 100 = 16% ery Cost = %35;00,000 * | 6) Calculation of Selling overheads (Based on % 0 F i Rate of Overheads as a proportion Feat he year 2014 Selling Overheads for" £99,200 x 16% = ¢ 5,312 @ 16% on Factory Cost 25,312 + 12.5% of € 5,312 Selling Overheads for 2014 . = 25,976 ‘Scanned with CamSeannera” 316 Cost Accounting (TYB.Com. : SExy, Hh (6) Calculation of Distribution Overheads (Based on % of Factory Cost) £2,80,000 , Rate of Overheads as a proportion to Factory Cost = ¢on.00,000 * 17 10% Distribution Overheads for the year 2014 @ 10% on Factory Cost Distribution Overhoads for 2014 = £39,200 x 10% = 7 3,320 = %3,920 - 10% of € 3,320 22,988 Mlustration 26 : ‘The Trading Profitand Loss Account of Vijaya Manufacturing company for the year ending 91-12-2913 was as follows yh Or. Tradiag Profit and Loss Account For the Year ended 31-12-2013 te, Particulars @_| Particulars z Jo Raw Material Purchased 80,000] By Sales (2500 units) __ | 250.009 To Direct Wages 30,000 | By Closing Stock of Raw Material 5,000 To Direct Expenses 25,000 To Factory Expenses 40,000 To Gross Profit cid 80,000 2,55,000 2.55.00 To Office Salaries 25,000 | By Gross Profit b/d 20,006 To Office Rent 42,000 | By Dividend Received 10,000 7,500 To Selling Expenses 42,500 | By Discount Received To Preliminary Expenses Written-off | 2,500 To Goodwill Written-off 5,500 To Net Profit c/d 40,000 97,500 For the year 2014, it is estimated that - (1) Units produced and sold will rise by 20%. (2) Prices of Raw Material per unit will rise by 10%. (3) Direct Wages per unit will Increase by 25%. (4) Direct Expenses will increase by % 5,000 in total. (6) Factory Expenses per unit will ncrease by 25%. (6) The Office premises which was on rental basis in 2013 would be purchased by the company. on which depreciation would be © 6,000 in 2014, (7) Selling Expenses per unit will remain same. You are required to prepare a statement showing estimated cost and profit for the year 31-12-2014 considering that company shall charge a profit at 20% on sales. Solution : (T.Y.B.Com., March 03, adapted) VIJAYA MANUFACTURING nded Cost Sheet Showing Present and Estimated Cost STEP ELEMENT OF COST ‘A. Direct Material B. Direct Wages 30,000 ©. Direct Expenses D. PRIME COST teenea $00 E. Factory Expenses 40.000] oO 4 F FACTORY COST 170,000) 78. 0 Scanned with ComScanner| | } | ' | sification of Costs and Cost Steers 37 Office & Administration % Office Salaries Exponses Office Rent ne 5 Depreciation A 6 4. COST OF PRODUCTION 14.60) WY sales Expenses 82.80 J. COST OF SALES __5.00) x PROFIT 87.89 5 LES 2 LSM 250,000] _ 100.00) notes ¢ (1) Units to be produced in 2014 will ise by 20% i.e. 2,500 + 500 = 3,000. {2} Per unit cost of Raw Material in 2013, will increase by 10% in 2014 i.2. 90 + 10% of 30 = © 33. (g) Perunit direct wages will increase by 25% i.e. 12 + 25% = 15 {a) Per unit cost of factory expense will increase by 25% in 2014 i. € 16 + 1/4 of € 16 = £20. {g) Salary is assumed to be the same in 2014 as in 2013. {@) The premises which was on rental basis in 2013 is assumed to be purchased in 2014 and hence office rent will not appear in 2014. Instead depreciation of € 6,000 would be charged. (Preliminary expenses written off and goodwill writen off are financial expenses / losses and hence will not be shown in the cost sheet. (@) Dividend received and discount received are financial incomes and hence will not be shown in the cost sheet. (9) Profit for year 2013 is a balancing figure. For year 2014 profit is 20% on sales i.e. 60 (profit) = 100 (S, P.). Profit is 1/4 or 20% of cost in 2014. iustration 27 af WWD - (cost) +20 Dr. Trading and Profit and Loss Accounts of MK & Co. cr. For the Year Ended 31st March 2013 L Paniculars @_| Particulars z ToMaterials Consumed 3,75,000] By Sales (15,000 units) +15,00,000 To Direct Wages 2,25,000] To Factory Overheads 3,00,000 To Gross Profit c/d 6,00,000 ¥5,00,000 '75,00,000 To Office Rent 90,000) By Gross Profit b/d “5,00,000 To General Expenses 75,000) By Dividend Received 13,500 To Management Expenses By Interest on Investment 6,500 To Goodwill wioff To Advertisement To Salesmen Commission To Interest on Loan ToNet Profit o/d 6.20,000 For he year ending 31st March, 2014 following estimates have boon made (@) Production and sales units will be doubled (0) Direct material cost per unit will rise by 20%. ©) Direct wages per unit will increase by 40%, (8) Ol the faciory overheads, &1,50,000 are Fixed and would remain atthe samo level but variable Fe eae oesin same proportion to direct wages as in 2012-13, (©) Total oftce and administrative overheads would increase by 40%, © Seling and Distribution overheads per unit will increase by 20%, {Q) Seliing price per unit would rise by 10%. You are require to prepare \ded 31st March, 2013 showing cost per unit and total cost and ) Cost Sheet for the year en 6) Project coat sheet forthe year ending 91st March, 2014 showing cost per unt and total cost Scanned with CamScanner318 , Cost Accounting (L.¥.B.Com, Solution : (F¥.B.Com., Oct. 2011, adnpieg, COST SHEET 3132019 ~~ | 8r-a2010 —~ STEP ELEMENT OF COST Units : 15,000 Units : 30.000 e Rate 7 Plate Por Unit __| Per una A. Direct Materials 3,75,.000] 25.00] 9,00.000 2,25,000] _15.00| 6,30.000 B. Direct Wages 6,00,000| _40.00/15.30,000 C. PRIME COST D. Add : Factory Overheads Fixed Variable Total Works Overheads E. WORKS COST F. Add : Office/Administrative Overheads 1,50,000] 10.00] 1,50,000] 5.4, 1/50,000| 10.00] 4,20,000} sa, 3,00,000| 20.00] 5.70.000| 19.05 9,00,000| 60.00 |21,00,000| 70.09 Office Rent 90,000 General Expenses 75,000 60,000 ‘Management Expenses Total Administrative Overhead: G. COST OF PRODUCTION 2,25,000| 15.00] 3,15.000| 1050 7,25,000] 75.00[24,15,000] 050 H. Selling & Distribution Overheads " Advertisement cu | 191.280] 8.75] 3,15,000] 1050 Salesmen Commission 1350,000] —_10.00| 3,60,000| _ 1200 Total Selling & Distribution Overheads 2,81,250| 18.75] 675,000] 2250 114,06,250| 93.75]30,90,000] 103.00 93,750 6.25| 2,10,000| 7.00 '15,00,000| 100.00 [33,00,000] _ 110.00 |. TOTAL COST/COST OF SALES J. PROFIT K, SALES et Notes : 1, Material Per Unit : 25 + 20% = % 30 per unit 2. Wages Per Unit : 15 + 40% = € 21 per unit 3. Factory Overheads : Fixed : Remain same ie. € 1,50,000 Variable : in proportion to direct wages (21 x 10/15) = € 14 per unit 4, Total Administrative Overheads : 2,25,000 + 40% = 3,15,000 5. Selling Overheads : Advertisement = 8.75 + 20% = & 10.50 per unit Salesmen Commission = 10 + 20% = & 12 per unit 6. Selling Price = 100 + 10% = % 110 per unit Mlustration 28 : (Fixed and Variable on /” KT manufacturing company gives you the Yollowing particulars for the year 2014. Production a sales during the year was 10,000 units. < Particulars Materials. 2,50,000 Direct Wages 1,50,000 Administrative overhead (fixed) 1,00,000 Sales 12:00,000 Profit 2,50,000 Factory Overheads Fixed 1,00,000 Variable 2,00,000 Selling and Distribution Overheads :- Fixed 60.00) Variable 90.0 ‘Scanned with CamSeannerusification of Costs and Cot Sheet a” re company has worked fis decided To increase pr xin #7 eapaciy of 10.000 units ding 2044. The management fon capac tha yaar 2015 and is ostated (7%B.Com, Oct. 2003, SYBAF, Oct. 2015, adapted) Ws. KT MANUFACTURING COMPANY. Gost Sheet For the Year Ended 3181 March 2014 & 2015 ore 2018 wir STEP ELEMENT OF Cost 10.000 Unis 15.000 Units Toil Cos Unit Cos) Total Cos Unit Cost € z z ft ‘Direct Materia! 250,000] 25.00) «,12.500| 2750] 1 B. Direct Wages 180.900] __15.00] 247.500] __16.50] 2 ©. PRIME COST 00,000] —40.00)_6,60,000) —aa.00| B. Factory Overheads. =Fed . 1.00,000} 3 Ca 7 2,00.000| 4 — FACTORY cost 7,0 000] F Administrative Overheads..." | ‘on.000| __10.09| 5 G. COST OF PRODUCTION 00,000] 80.00 2.00 x - | 50,000} 6.00] 420] 6 90,000] __9.00| — 290] 7 350,000] 95.00 36.70 | 250.000) __25 09] 23.0 72:00,000] ~v20.00| 720-00 a ‘Aiematvely,tmay be assumed that only Factory Variable Expenses and Sales Variable Expenses Unit Cost = 25.00 + 250 £27.50; Increase = 10% of 25 =25 ‘Cost = 15,00 + 1.50 =€ 1650; Increase = 10% of 15 = 1.50 0.000 (4) Factory Overheads (Variable) = Unit Cost = 20 + 200 = 22 ‘Uni Cost = 2,00,000 + 10,000 = 20 Increase = 10% of 20= 2 Administration Overheads (Fixed) = 1,00,000 + 20,000 = 1,2,000, (000 = 20,000 (od) = 60,000 + 12,000 = 72.000 (900 = 12,000, ‘Scanned with CamSeanner320 Cost Accounting (TY. Com, Shy Factory Overhends Fivad 2 18,00,000, Variable & 10 Per Unit Fixed t 12,50,000 Fixed & §,00,000, Variable & 25 Por Unit Units Produced and Sold 50,000 Solting Price Per Unit € 210 Following changes aro anticipated during the year ended 31st March, 2015. (1) Production and Sales wil increase by 60%. (2) Direct Material cost per unit will increase by 12.5%. (8) Direct Labour per unit will decrease by 5%. (4) Chargeable expenses per unit will decrease by 10% (5) Variable factory overheads per unit will increase by 25% (6) Vatiable selling overheads will decrease by 25%. (7) Allfixed overheads will increase by 20%. (8) 75% of the output will be sold in Domestic Market at a profit of 20% on sales. (9) Balance 25% output will be sold in Export Market at a profit of 50% on sales. You are required to : \ (1) Prepare a Cost sheet for the year ended 31st March, 2014 and estimated cost sheet for tha ended 31st March, 2015, showing total and per unit cost. (2) Calculate total and per unit profit for the year ended 31st March, 2014. (3) Calculate total sales and profit for Domestic Market and Export Market. Solution : (TY.B.Com., Oct. 2005, adapteay Office Overheads Selling Overhoads esr Cost Sheet ] aaa 2015 STEP ELEMENT OF COST 50,000 Units 80,000 Units Total Cosi] Unit Cost] Total Cosi] Unit Cost z z a z ‘A. Direct Material 18,00,000| 36.00} 32,40,000| 40.50 B. DirectLabour 14,00,000] 28.00]21,28,000] 26.80 ©. Chargeable Expenses 5,50,000| 11.00] 7,92,000| 9.20 D. PRIME COST {37.50,000|75.00[61,60,000] 77.00 E. Factory Ovetheads : - Fixed 15,00,000] 30.00) 18,00,000] 22.50, - Variable |_8.00,000] 10,00] 10,00,000| 12.50, F. WORKS COST 57,50,000| 115.00] 89,60,000[ 112.00 Office Overheads - Fixed coe 12,50,000| 25.00] 15,00,000| _18.75 G. COST OF PRODUCTION . 70,00,000[ 140.00]1,08.60,000[ 130.75 H. Selling Overheads Fixed 5,00,000] 10.00} 6,00,000 + Variable 12,50,000| 25.00] 15.00,000 1. COST OF SALES 87.50,000| 175.00] J. PROFIT 17,50,000| 35.09] K._SALES ; }1.05.00,000] 210.00)1,80,56,000 Working Notes : (1) Direct Material Cost Per Unit In 2015 : 36x 112.5% = 40.50 (2) Direct Labour Cost Per Unit In 2018 : 28 x 95% 26.60 (3) Chargeable Expenses Per Unit in 2015 11 x 90% - 9.90 (4) Fixed Factory Overhends in 2018 : 15.00,000 x 120% = 18,00,000 Variable Factory Overheads in 2015 : 10 x 125% = 12.50 Ixed Ottice Overheads In 2016 : 12,50,000 x 120% = 18,00,000 ‘Scanned with CamSeannersification of Costs and Cost Sheers ed Selling Overheads in 2015 Fle Soll + 5,00,000 x 120% = 6,00,000 variable Selling Overheads in 2018 : 25 x 75% = 18.75 ale in 2015 = 5 x 78% # 18.75 @) 5 int sold in 2015 = 50,000 x 160% = 80,000 Pomostic Sales in 2015 = 60,000%75% = 60,000 exports in 2015 = 80,000%.25% = 20,000 gale price per Domestic unit - price Cost 100 80 2 187, = 157 x 100 = 196.25 80 gale Price Per Export Unit : price Cost 100 50 2 157 = 12 x100 = 314 50 Domestic Sale= 60,000 x 196.25 = 1,17,75,000 Exports = -20,000x314 = _62,80,000 Total = 7,80,55,000 tustration 30 : (Fixed and Variable OH) \//~ The Management of a manufacturing concer he cost of 6,000 units. The cost analysis of 4,000 units Materials ¥ 90,000, Labour % 50,000, Administration Overheads & 1,600 and Selling an The further details in this connection are as follows: {@) An increase of 10% is expecte’ (b) 70% of the factory overheads are fixer (¢) The ratio of fixed and variable part of Administration ove (6) 50% of the Selling and Distribution overheads are fixed. The Management desires to charge 25% profit on sale price. Prepare cost statement with maximum break up of cost and ascerts gives the follow! .d and 30% are variable. 1 has approached the Costing Direct Expenses % 1,000, Factory .d Distribution Overheads < 800. din the cost of raw material and 5% in jing results : heads is 60 : 40. ain selling price for the producti (TY.B.Com., Mar, 07, adapted) jal Department to find out Overheads % 2,000, the cost of labour. 6000 units. Solution : Cost Statement 4,000 Units 000 Units ELEMENT OF COST Total Cosi] Unit Cost| Working | Unit Cost |Total Cost é “ e fs 4. Direct Materials 90,000] 22.50} 22.50 + 10% 24.75] 1,48,500 ¢, Direct Wagos 50,000] 12.50] 12.50 + 5% 13.13] 78.780 4 Direct Expenses 1,000 0.25] Same 0.25 1,500 PRIME COST 741,000 95.25 38.13] 228,780 ‘ beset Overheads 2,000 0.50 ».000 Shots ,000 x 70% 0.23 gm Neriable 0.50 x 30% O15 nan ‘ WORKS cost 7.49.000 [0575 Sestt Sat oR r. in. Overheads o E ‘ {Fixed 1,600 x 60% 0.16 960 Variable 0:40 x 40% 0.18 seo Scanned with CamScanner322 Cost Accounting (.¥.B.Com, : H. COST oF py 7 RODUCTION 4 ; 1 Salessdist, Overheads iano| “O26 89/280 + Variable 012050" oxo] 0.20 x 50% x J. : ia Pasner SALES 48,4001 36.35 39.0013 a ae 1/3 on Cost 13.00] “399% J es | 52.001 3.125 Nlustration 31: Swadesh Electronics Ltd. tumishos to you the following information for the year ended 31:1 4, Production and Sales 15,000 units Sales 12.75.0050, Direct Wages £2,70.005 Direct Materials 73.30.00 Factory Overheads 72.25.00 Administrative Overheads 2 1,05,000 Sales Overheads 90,000 ‘On account of intense competition following changes are estimated in the subsequent year (1) Production and sales activity will be increased by one third. (2) Material rate will be lower by 25%, However there will be increase in consumption by 20%, 4, to quality differenge, (3) Direct wages cau Nobo reduced by 20% due to automation. (4) Out of the above factory overheads, 45,000 are of fixed nature. The remaining factory excences are variable in proportion to the number of units produced. (5) Total administrative overheads will be lower by 40%. (6) Sales overheads per unit would remain the same. (7) Sale price per unit would be lower by 20%. Prepare a statement of cost for both the years ending 31st March, 2014 and 31st March, 2015 showing maximum possible details of cost. Solution : SWADESHI ELECTRONICS LIMITED Cost Sheet For the Year Ended 31-3-2014 [Output : 15,000 Units) STEP ELEMENT OF COST Total Cost| Unit Cost z A. Direct Materials 3,30,000 B. Direct Wages 2,70,000 C. PRIME COST 6,00,000 D. Factory Overheads |_2:25.000 —. WORKS COST 8,25,000 F. Administrative Overheads 1,085,000 G. COST OF PRODUCTION : 9,30,000 H. Sales Overheads ‘20,000 1. COST OF SALES 10,20,000 J. PROFIT ~ |_2,55,000 K. SALES cis 42,75,000 Estimated Cost Sheet For the Year Ended 31-3-2015 [Output : 20,000 Units] Total Cost] Unit Co" STEP ELEMENT OF COST (Note) z Si < ‘A. Direct Materials 2) | -a6o00) 9% Direct Wages (3) | 288.000 PRIME COST 6 84.000 Factory Overheads f (4) | _2'85.000 /ORKS COST ve 969,000 ‘Scanned with CamSeannera. wssifcation of Costs and Cost Sheers Administrative Overheads mw & cost OF PRODUCTION 3:18 fi Sales Overheads 51.60 COST OF SALES 6.00 5. PROFIT 37.60 x._SALES _10.40 Gorking Notes : 1, Production & Sales (Units) zoe 2018 ‘add: 1/3 increase 15,000 », Material Unit Cost 0 anaed Less: 25% reduction in price aoa ‘add: 20% increase in consumption een 19.80 4, Direct Wages Unit Cost 78.00 Less: 20% reduction i 360 14.40 Factory Overheads Fixed 45,000 45,000 Variable (Per Unit & 12 x Units) 41,80,000 2,40,000 Total 2,25,000 2,85,000 5, Administrative Cost 1,05,000 Less: 40% reduction _42,000 63,000 Sale Overheads Per Unit (6) is same for both the years. 1, Sale Price 85 Less: 20%,reduction — 68 ting OH) wy 92 : (Working back Sales and Sel nutactures Pressure Cookers. For the year endins follows for an output of 2,000 units. tlustration .g 31st March, 2013, Domestic Appliances mat expenses incurred are as 2,00,000 1,00,000 1,60,000 Raw materials consumed Direct wages Factory overheads Administrative overheads ‘46,000 Seling overheads (10% of sales value) 70,200 Distribution overheads: 36,000 During the year, 200 units were unsold. hanges were estimate For the year 2014, the following ct imption per unit would decrease by 5°. {a) Raw materials price would rise by? {b) Direct wages would rise DY 3.5%. fixed and would remain atthe (©) Ofthe factory overheads € 60.000 are n thereof eau te in same proportion tO Direct wages as in 2013. (@) Administrative overheads would nse BY 20%. (@) Seling overneads as a percentag® pales value would remain atthe same level and distribution overheads would remain same per unit as in 2013. (0 The output and sales would be 3.000 pressure cookers. (0) Expected profit in the year 2074 is 40° of sales. From the above information prepare = ane tbeve ie year 2013 and projected cos sect of the year2014 showing perunit and total cost. 2) Working notes for the projected cost sheet ‘3) Projected sales price- (TY.B.Com,, April 2001, adapted) (0% but consu! same level but the variable ‘Scanned with CamSeannerM/s. DOMESTIC APPLIANCES, Cost Sheot re 2019 ELEMENTS OF COST Produced : 2,000 units Sold : 1,800 units Sold : 3.000 Units Total Cost] Units [Unit Cost Total Gost] Units [unica fa No, ce | ¢ No. A. Direct Material 2,00,.000] 2,000” 100.00] 3.13,500] 3.000 B. Direct Wages 1,00,000} 2,000] _50.00] 1,55.250] 3,000 C. PRIME COST 3,00,000] 2,000] 150.00] 4.68,750] 3,000 D. Factory Overheads Fixed 60,000] 2,000 60,000] 3,000 Variable 1,00,000} 2,000 1,55,250| 3,000 E. FACTORY COST 4,60,000] 2,000 6,84,000] 3,000 F. Administrative Overheads | 46,000} 2,000 G. COST OF PRODUCTION | 5,06,000 H. Less : Closing Stock of 55,200] 3,000 7,39,200 Finished Goods 50,600 200 = 7 ea |. COST OF GOODS SOLD | 4,55,400] 1,800] 253.00] 7,39,200] 3,000 J. Selling Overheads 70,200} 1,800} 39.00] 1,59,840] 3,000 K. Distribution Overheads 36,000] 1,800} _20.00] 60,000] 3,000, L. COST OF SALES 5,61,600} 1,800] 312.00] 9,59,040| —_3,000 M. PROFIT 1,40,400] 1,800] +_78.00] 6,39,360} 3,000 N. SALES 7,02,000} 1,800] 390.00 |15,98,400| _ 3,000 Notes : (1) Raw Material Cost : Raw Material P. U. In 2013 100 Add : Increase by 10% —10 110 Less : Decrease by 5% In 2014 (2) Direct wages per unit rises by 3.5%. (3) Factory Variable Overheads in 2014 (in proportions of direct wages as in 2013) Ek 185:250 y 4,00,000 = 1,55,250 1,00,000 Wages Variable Overheads In2003 ——*4,00,000 1,00,000 In 2004 1,55,250 ? Total —_(1,55,250 + 60,000) 2,15,250 (4) Administrative overheads will increase by 20% i.e. 20% rise in the amount of administt® expense, : (5) Selling overheads as a percentage of sales is 10% in 2013. Profit is 40% of sales (aie Let sales be 100, ". Selling overheads (10% of 100) 10 Total cost excluding selling overheads wil be 50. Cost Sales 50 100 (246.4 + 20.00) 266.40? (592,80) - Selling price per unit = 532,80 Sales = 532.80 x 3,000 = 15,98,400 Selling overheads = 10% of 15,98,400 = 1,59,840 Scanned with ComScanner