Production cost statement

Opening inventory raw materials

Add Purchases raw materials
Add Carriage inwards
Less Returns of raw materials
Less Closing inventory raw materials
cost of raw materials consumed
Direct Labour/wages(860-70)
Direct expenses
Prime costs
Factory overheads:
Factory salaries (ratio)
Factory Water
Factory power
Supervisors Salaries
Factory rent(ratio)
Total factory overheads
Add opening work in progress
Less closing work in progress
cost of goods produced(Manufactured)

Opening inventory R.M+Purchases of R.M+carriage inwards-Returns of R.M-Closing inventory of R.M=

Cost of raw materials consumed +Direct labour+Direct expense=Prime costs

Prime costs +Total factory overheads+Opening W.I.P-Closing W.I.P=

3/5*530,000(Factory salaries)
2/4*720,000(Rent)
 Shs.
840,000
6,200,000
80,000
-170,000
-510,000
6,440,000
790,000
0
7,230,000

318,000
0
210,000
0
360,000
888,000
330,000
-400,000
8,040,000

.M-Closing inventory of R.M= Cost of raw materials consumed

Cost of goods produced

c
Income statement

Sales
Less returns inwards
Net sales
Opening inventory finished goods
Add Cost of goods manufactured(produced)
Less Closing inventory finished goods
Cost of goods sold
Gross profit
Adminstration Expenses/overheads
Adminstration salaries
stationery
Adminstration rent
Total Adminstration Expenses
Selling and distribution Expenses/overheads
Selling and distribution rent
Carriage outwards
Total Selling and distribution Expenses
Net profit
Shs.
xx
(xx)
xx
xx
xx
(xx)
xx
xx

xx
xx
xx
xx

xx
xx
xx
xx
Cost statement
Shs.
Opening inventory raw materials xx
Add Purchases raw materials xx
Add Carriage inwards xx
Less Returns of raw materials (xx)
Less Closing stock(inventory) raw materials (xx)
cost of raw materials consumed xx
Direct Labour/wages xx
Direct expenses xx
Prime costs xx
Factory overheads:
Factory salaries xx
Factory Water xx
Factory power xx
Factory rent xx
Total factory overheads xx
Add opening work in progress xx
Less closing work in progress xx
cost of goods produced xx
Adminstration Expenses/overheads
Adminstration salaries xx
stationery xx
Adminstration rent xx
Total Adminstration Expenses xx
Selling and distribution
Expenses/overheads
Selling and distribution rent xx
Carriage outwards xx
Total Selling and distribution Expenses xx
Total cost of sales xx