Cost Sheet Problems

PROFORMA COST SHEETFOR THE PERIOD ENDING…..

Particulars Rs

Opening stock of RM XXXX

+ Purchases of RM XXX

+ Carriage Inwards XXX

- Closing Stock of RM XXX

COST OF MATERIALS CONSUMED XXXX

Direct labor cost XXX

Direct Expenses XXX

PRIME COST XXXX

Factory overhead XXX

+ Opening stock of WIP XXX

- Closing stock of WIP XXX

Work Cost XXXX

Direct material Cost

Indirect Factory Cost

Contd……….

Office & Administrative overheads XXX

COST OF PRODUCTION XXX

+ opening stock of FG XXX

- Closing stock of FG XXX

COST OF GOODS SOLD XXX

Selling & Distribution overheads XXX

TOTAL COST OF SALES XXX

PROFIT XXX

SALES XXX

PROBLEM 1:38&39

FROM THE FOLLOWING PARTICULARS YOU AREREQUIRED TO PREPARE A STATEMENT SHOWING :

1. value of materials consumed

2. Total cost of production

3. Cost of goods sold

4. The selling price of each unit of the commodity

Particulars Rs

Opening Stock of Raw Materials 25000

Opening Stock of finished goods(400units) 20000

Wages paid to laborers 100000

Raw materials bought 250000

Closing Stock: 1.Raw Material 2. Finished Goods(800 units)

2000025000

Chargeable expenses 10000

Rent Rates and Taxes(Factory) 25000

Motives power 10000

Factory heating& lighting 10000

Factory Insurance 5000

Income tax paid 6000

Experimental expenses 2500

Waste Materials 1000

Office salaries 20000

CONTD

Printing & Stationary 1000

Salesmen’s Salary 10000

Commission to Travelling agents 5000

Cost of Free samples 500

Donations to charitable funds 1000

WIP- on 1st Jan On 31st Dec

9003000

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

Solution:- Cost sheet Particulars Rs Total Cost Cost Per Unit

Opening Stock of RMAdd- Pur of RM

Less- Closing stock of RM

Cost of Material Consumed

Direct WagesChargeable exp

Prime Cost

Factory Cost:-Rent

Motive PowerHeating

Insurance Experimental

expensesWaste Materials

2500025000027500020000

25000100001000050002500

1000

25500010000010000

365000

Particulars Rs Total Cost Cost Per Unit

Add- opening stock Of WIP

Less- closing stock of WIP

Work Cost

Office on costSalariesPrinting

Cost of productionAdd- opening stock of

FG

Less- closing of FG

53500

90054400

3000

200001000

51400416400

21000

437400

2000045740025000

432400

8.0365.06

3.28

68.34

-----68.34-----

72.066


Selling & Distribution O/H

SalaryCommission

Free SamplesOther Selling exp

Cost of SalesProfit 1/3 on cost

Sales

WORKING NOTES:-

Units produced Add- opening stock of

FG

Less- closing stock

100005000500

120016700

449100149700598800

Units sold

2.78474.8524.9599.80

6400units

400units6800 units800units

6000 units

Calculation of other selling expenses on units sold


For 6000 units @ Rs. 0.20p = Rs. 1200

(2)Calculation of Profit on cost price

Selling Price= Cost Price + Profit100= 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 Rs

Opening Stock of Raw Materials 10000

Purchases 85000

Closing Stock 4000

Direct Wage 20000

Other direct expenses 10000

Factory overheads 100% of direct wages

Office overheads 10% of work cost

Selling expenses Rs.2 per unit

FG- opening stock 1000 units Rs. 16000

Produced during the year 10000 units

Closing stock 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:- Cost sheet Particulars Rs Total Cost Cost Per Unit

Opening Stock of Material Consumed

Direct WagesOther direct expenses

Prime CostFactory overheads

(100% Direct Wages)

Factory CostOffice & Admn

overhead10/100*14100

Office costAdd- opening stock of

FGLess- closing

stock([email protected])

Cost of goods sold

910002000010000

121000

20000141000

14100

155100

1600017110031020

14080

9.102.001.00

12.10

2.0014.10

1.41

15.51


Selling & distribution overheads

9000units @ rs.2/- PU

Cost of salesProfitSales

18000

15808039520

197600

Selling price per unit= 197600/9000= Rs.21.96

Working note:-Calculation of Unit Sold Opening Stock of FG 1000Add- Produced during year 10000Less- Closing Stock of FG 2000Unit Sold 9000

Calculation of Profit

Selling Price = Cost Price + Profit 100= 80+20 158080*20/80= 39.520

Problem 3: pg 43

The following details have been obtained from the cost records of comet paints ltd.

Particulars Rs

Stock of RM on 1-9-2010 75000

Stock of RM on 30-9-2010 91500

Direct Wages 52500

Indirect Wages 2750

WIP on1-9-2010 28000

WIP on 30-9-2010 35000

Purchase of RM 66000

Factory rent, Rates and Power 15000

Depreciation on P& M 3500

Carriage on purchases 1500

Office rent and taxes 2500

Stock of FG on 30-9-2010 31000

Stock on FG 1-9-2010 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:- Cost sheet Particulars Rs Rs

Opening stock of RMAdd- Purchase of RM

Carriage inwards

Less- closing stock of RMCost of material

Direct wagesPrime cost

Factory Overheads:-Indirect wages

Factory rent, rates& powerDepreciation on plant

Add- opening Stock of WIP

Less- closing Stock of WIPWorks Cost

Office & Administrative overhead – office rent

Office Cost

75000660001500

14250091500

2750150003500

5100052500

103500

2125012475028000

15275035000

117750

2500120250

Particulars Rs Rs

Add- opening stock of FG

Less- closing stock of FGCOGS

Selling & DistributionCost of Sales

Profitsales

5400017425031000

14325017906

16115617906

179062

Working Notes;-Let SP 100Less- Profit 10% 10Cost of sales 90Less- selling & Distribution 10--------- 10% on saleCP 80 Calculation of Selling & Distribution overheadsCP+ profit= Cost of Sales80+10=9010/80*143250=17906

Calculation of profitSP= CP+ Profit= 100= 90+1010/90*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 Rs.

Opening Stock 14000

Purchases during the year 100000

Closing Stock 10000

Direct Wages 20000

Work Overhead -50% on direct wages Stores overhead on materials- 10% on the cost of materials10% 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:- Cost sheet Particulars Quantity RS RS

Opening Stock of RM+ Purchases

-Closing stock of RMCost of materials Consumed

Direct wagesPrime Cost

Work Overhead- 50% of Direct wages

stores Overhead- 50% of Direct materials

Total cost of gross output-Sales of rejected costingCost of finished Costing

Additional cost of rectifyingManufacturing Cost

2000200

1800---

1800

1400010000010000

10400020000

124000

10000

10400144400

800143600

360143960

Working Note: Cal of cost of rectification20/100of 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 Rs.

Fuel (coal) 2500kgs@ Rs. 15per kg

Wages 10 laborers for 150days @Rs.50 per day

Royalties 0.75 per 1000 bricks

Depreciation on equipment @10% on Rs. 150000

Handling charges 0.50 per 1000 bricks

Work expenses 10% of wages and coal

Administrative expense 5% of wages and coal

Bricks made 5200000

Stock on 1-1-2010 100000@Rs. 40 per 1000

Stock on 30-6-2010 1100000

Actual breakage 200000

Bricks sold 4000000 @ Rs.50 per 1000

Production data

Solution:- Cost sheetParticulars Cost per 1000 bricks Total cost for 5000000

Coal: 2500kgs@ Rs.15 per kg 7.50 37500

Wages: 10*150*50 15.00 75000

Royalty 0.75 3750

Prime cost 23.25 116250

Works exp- 10% of wages & coal

2.25 11250

Handling Charges 0.50 2500

Dep- 10% on Rs. 150000 3.00 15000

Work Cost 29.00 145000

Administrative exp- 5% of wages & Coal

1.125 5625

Cost of Production 30.125 150625

+ Opening stock 4000

- Closing stock 33138

Cost of bricks sold 121487

Profit 78513

Sales 200000

THANK YOU!!!!

Cost Sheet Problems

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