278

of each Job, (se and ( mt

Cont 4cconnting (1. , Sheon
Job Order Contract ete., B.Com. 1SEM sle to
Are a p l i c a b l e t a ,

Costing Costing. Terminal

Control its costs during its execulion.Jo osting is ale
Mil,mhtries nueh teel, as
JobOrderCostal Costing. RISenapplie, reweries, Vaper
Costing. Specific ('oting ete Following are the dierent
4 r k , n

ie Mine
Costing
cuNtOmer' as: that g . (2)Contractosting
s spectal requirnn g and
an ) yylies
Batch Costing 1CMA has
sling
when the Mlla, Pervea olieres
coneorn pr fextils,
wth
form of
yif sperific
i c onkr vring whih wplies when ork idef punening Wle
those to on dration t(co
durution o/ shmnt Proce ting inee in heh ferent arsedesgrelhet
end eah onker commprativwy
erific orderwhich
in

oontrat ess ( osting

costing NTngcosting applies)
«a g IMA has detined osting as
of imilar ar7iles nhich maintain that
ateh (
more crmplex n ments e fosting
1

ne
ostig a sisn le?
Oughout one or wch ovonsINN Of a ion
2UNITSU SED IN nature thanthefentieal startiard term graireoef
mon stug
PROCESS coSTING
ages of prdw
tiom tdem eylaned ahy,
DIFFERENT
Costing thenit INDUSTRIES
nit
Combimg
The
he chemical company h e

ts uscd inn vafions

n a t u r a l

varuns industriesontput
u n i t s ,

industr ies e s measured

ured m'tatural
EXHIBIT2: DIFFERE UNITS employing nt
m
t ot
drug n the other hand, not interested in finding Out
is
the cost of cae
naturel ansts Follerwg
produved ction of drugs may, however, involve three processes
Costinvg
Making. Mixing
COst and
of each
The
Production of
Packing in Capsules. drnugs will be intet
divid
Powdes
process rather than t drug. Its
wil there epa
process as a of cacn cos ddetermined Industries
hethod of
cost unit. The
costing used in such
ulted, classie process-wise The
U n i t

Tonno
Steel Product
cases is known as Process ostimg.
a Colieries Steel Bars. Ingots
6 OTHER METHODS Quarries Coal
Job Co Mines
OCess Costing are the two basic methods of costing employed dependine Stone
Osting is used where the cost units
are dilierent or distinet from onPon Kilns Mineral Ors
nstruction johs. printing johs, hatches etc. Process Costing is used where the cost uniteno Sugar Mils uime Stones
Service Industries
duction involves two or more processes or operations, e.8. Chemical
All other methods of costing are types oft conmbination of these t i
Cement Sugar
hethods. The
etc.
Chart below shows the different methods of costing talling under these t ai
K.G.
Paper Mil Cement
methods wo main Spinning Mils Paper
Yarn
Sacks
Flour Mills
1.7 Flour
EXHIBIT 1: METHODS OF COSTING Barrels

1,000No.
Breweriess
Brick Making Beer, Wines
METHODS OF COSTING
Metre/ Yards
Textile Mills Bricks
Cloth

wORKSHEET 1:COSTSHEET
Cost Sheet based
ma Cost based on
the latest,
The pro-forma
JOB COSTING PROCESS COSTING a slollows
mandatory Cost Accounting Standards wouid app
cOST SHEET
1. Job Order Costing { 1. Process Costing
ELEMENT OF COST
STEP
2. Contract Costing 2. Unit Costing Direct Materials
A.
Opening Stock of Raw Materials
3. Batch Costing 3. Operating Costing Add: Purchases of Raw Materials
X
Expenses on Freight etc.
XX
COMBINATION Less: Closing Stock of Raw Materials
Net Materials Consumed (Xx)
COMPOSITE COSTING
B. Direct Wages XX
C. Direct Expenses
D. PRIME COST .A+ B+C XXX

2 OUTPUT COSTING& UNIT CoSTING E. Works Overheads

Less: Sale of Scrap/ Waste/ Recoveries (xx)
XX

2.1 MEANING AND APPLICABILITY G Work in Progress

Add: Opening Stock XX
When the concern produces onlya single item the costing method is called
single or output costing Less Closing Stock (XX) XXX
which is a form or type of Unit Costing. Unit Costing is employed when the manufacturing i XXX
continuous and theunits produced are identicul. It is a method of costing used to ascertain the cos
H. WORKS CoST(D+E-F +G] XXX
per unit produced. Unit Costing is applicable to many industries where the output is expressed in
Quality Control Costs
XXX
natural units such as Numbers, Tonnes, Kilograms, Litres, Metres and so on. Thus Unit
Costing
J. R&DCosts
280 aftots and (ou Sheetn
Cost Accounting (7. V.B, B.Com. iSM PROF
AOFIT CENTRE

M.
Office/Administrative
COST OverheJ
OF PRODUCTION [H+*
K] i lc e n t r
uilar
trc is where conts are
to cOnt centres mut
collected aeerantahte
are We have seen
Finished Goods: ahle foe crets and revenes
tre managers shauld noemal. centre
Add: Opening Stock ORen,
e everal
n , several te aly have Anaf, unne, hwever, wnrk on a profit
heowever, wori hew
hasts urrea cont
centres will
r a r s e d and
Less: Closing Stock able to make decisioms abxaut venue

benh omorie one profit cen

m a g e r
w i l l

COST OF GOODS SoLD [L + M] as possible.

A y
prurchasung and elling ar e epecte
O. X ofi be judged prolit centre manager will want nfoemation
Sales/Distribution Overheads le on the profit margn
w i l l

rea
COST OF SALES [N costs which he
+O] cannot control, soachieved hry hes dvvisarr In practice may be 4
c o s l s .

() PROFIT/ (-) LOSS h e r ea r c

n d
able costs. In this he shoid be ibeutiom. bch s

R.
SALES [P : 0] ighestconiributi
case he will yudged on
want
information ahrat whuch products yield the
Information a

2.3 COST 27wVESTMENT CENTRE

PER UNIT ont centre is a
C Cost Per Unit each stage obtained as foIO proit centre with additional
at is
inve
aly for fnancing, andwnoepertormance is measuredresponsibilties for
Total Primc Cost
possibly
will take the tyts raurn on investment.
same decisions N e
wvestmem

Prime Cost Per Unit manofor

nsibilityfoor investment. profit centre manag
So he will
as he also has additional
a
Total Units Produced be judged ash surpluss
investments whichadditionally
to make only those on his handing of c
Works Cost Per Unit Total Works Cost he wi af capital. So the investment yield ahigher percentagr than he companys
informat1on as the
Total Units Produced
o t i o n a lc o s t
centre
manager and in addition he will red manager will want the same
tn
require quite detailed appraisals of possibie
investmenits

Total Cost of Production p r

cenation re
andftintormation
o .

regarding the results of investments undertaken. He will have

to make
Cost of Production Per Unit - Total Units Produced ments already
eaarding the purchase or lease of non-current assets and undertaken.
the tvestment*of cash surpluses
divided by Total roduced determine
Units Produced to
decisionsi sions involve large sums of
us. the costs upto the stage of production are the Mostof
these money.
Cost Per Unit.
DIFFERENT COSTSHEETS
UNITS OFFINISHED GOODS STOCK 2.8
1or 3
ADJUSTING eet prepared a
for cost centre will show only the cOSt of sales. A cost sheet prepared
for the opening and closing stock o
A cost shee
and closin of finished
thereafter adjusted
tre will also show the sales and the'profit. Acost sheet prepared for an irvestmentcentre
will al
The Total No. of
Units produced
centre

are
Thus, profit
, show financial costs- actual as well as notional costs of funds.
goods to arrive at
Sold.
the Quantity of Units m a y :

WORKSHEET 2:ADJUSTING FINISHEDSTOCK

UNITS 2.9
CoST ACCOUNTINGSTANDARDS
Quantity a1 Cost of Production(CAS-4)/Manufacturing Cost(CAS-22)
2.9.1 C o s to

Particulars XXx CAS4(Cost of Production)/ CAS-22 (Manufacturing ofCost) issued by

the ICWA, India
contains

No. of Units Produced

Add: No. of Units in Opening Stock XXX he following guidelines tor computing Total/ Per Unit Cost of Production: Direct Wages and
XXX Production :Cost of production shall consist of Material Consumed,
Cost of and Development
Less: No. of Units in Closing Stock (XxXx) Works Overheads, Quality Control cost, Research
Salaries, Direct Expenses, arrive at cost of
XXX cost, Administrative Overheads relating to production. To
No. of Units Sold Cost, Packing recoveries for sales of serap.
for stock of work-in-process, finished goods,
production, adjustment Cost' and'Cost ofProduction'
Is

Total Cost of Goods Sold shall be made. The term t The term Manufacturing cost
wastage etc. calculations of different
Cost of Goods Sold Per Unit To determine the cost of production,
Total No. of Units Sold used interchangeably.
are explained below:
Total Cost of Sales components and adjustments identified for production
Consumed: Material Consumed shall
include materials directly
Cost of Sales Per Unit= Total No.of Units Sold 2. Material
Units Sold to arrive at the Cost Per Unit. ofgoods such
as
Thus, the pertaining to Sales are divided by
costs
(1) Indigenous materials
is not given, it is to be determined by the
Note : If the value of closing stock of finished goods
(2) Imported Materials
following formula:
Units of Closing Stock x Cost of Production Per Unit (3) Bought out items
Thus, Closing Stock of Finished Goods has always to be valued at the cost of production. (4) Selfmanufactured items
other items.
(5) Process materials and freight inwards,
material, duties and taxes,
2.5 ITEMS EXCLUDED FROM COST SHEET
Cost of materials
consumed shall consist of cost of to procurement. Trade discount, rebates
attributable
expenditure directly materials. Cenvat credit,
Purely financial items (incomes/ expenses/losses / appropriations) such as interest, loss onsaleot i n s u r a n c e and other
deducted for determining
the cost of
fixed assets, dividends paid etc. are not shown in the cost sheet. (see Chapter 6, Para 3 for detailed items will be
and other similar
list of such items).
 /207
282

redit for Cost Accounting (7. Y.B.. asfs and Cot Sheen
.
duties countervailing customs
Direct subsequently recovered
Ustoms duty, Sales TaN sct of, VAT, duty draw back an
dny le byby the
recoverable
Wages and Salaries recovera And oher
enterprise shall also the deduhe
the e
s shall
.SEMA erheada

u c t i o m ,s u c
Vatia
verheads :(verheada
(verheads
cOMt of utiittesare the shall he
snsheed eto
itema ahrh
Direct :
cd in the rent volume o ete.
activities ehange withanae
n
vities. Directentive payments
amployees Fraed (Pverheah hesde.

(2) Bonus
i
made to employees
wages andsalaries include firinge benefits such
(1)Contribution to provievident fund and ESIS.
manuta
as
wwne crheads shall
heall be abuorbed in proxjuctiem hwch
d c t i o n overhcad

cot
he
a
preducton cont hasedalares,
an
eethe
the
the ehane 1

ren
in

stems w
tems whene vslue dn nunt chang
ete Fhe varahie proeduction
on
aetua
(3)Provisionex-grati
i
d e v e l o p m e n t

ratia
for retirepayment to employees.
(on cost
cproductiOnc

er iisshig
whicheveT
o s t on

higher.
the
basis rative
odof the cerheadsfixed
nor
a
cre
ch as
apeity stslenatvnn The fine
quaisty comtrol rEeBren ceat,
(4) Medical benefits gratuity and
superannuation. mal ing to
capacty e a manufacturng ohall
Chefits such as he aherhed n
" of
S) Subsidised food
Fialuationa

valucd at on
cost ont work-in prorew and
the basis of
ad."hedo.
actual caparty hrathom of he phant.
(6) Leave with shed stages of inished
hed gods:
ge Stock of
adjusted lorgoodscalcshall
nilarly, stock

pay and holiday

(7) Leave encashment
Simil
he
be be ompletion as work-n-grongsevs sha
paymen inished
sihall

ulation ofvaloedat cont.

BCCORunting principles
Opening and closing
per 1

pPeriod goods shall be adjusted of goods produced

p r o g r e s s

(8) Other stoter cont tock of wor

allowances as ildren's education allowance,
conveyance
which arepayabke
allowance whi
( to be
ofa
shorter
for duced and
is umlariy opening and
and despatc
to
Directemployees the normal
in course of business
etc. ailable, the adjustment
determined,
of where calculation of
the figures of goods ched io Ga the

Expenses : Direct exp the expenses other

than directmaterial coss
.TreatmentofsScrap Waste:
notr

figures of opening oropening a

closing stock are

employees ect expenses are

be identified with the product.

Direct expensesinclude. and The production and closing nay be ignored.
which can process may
Utilities such
not have generate scrap or
ready market and
edited cost of
thecoRt
to e ap waste. Realized

2) Royalty based
as fuel, power, water, steam elc. waste

e of input cost th of production. In case

used scrap
on
production.
taken at a

expenses
depending o
fapendine."
r reprocessing,
incurred 1or making the upon the stage at which suchtheTap
ses incurred scrap or waste value
) Technical Assistance/ The or waste is recycled.
know how fees. value of
scrap or waste. scrap suitable for
reprocessing shall be deducted from
-

s
4) Amortized cost Income:
of moulds. patterns. patentse eous
Miscellaneous income relating
(5) Job charges. 12.M
iscen of
calculation of cost
cost of
tor production p to oroduction shall be adjusted in the
(6) Hire ch of the goods produced under example, ncome
income from
from sale
sale of
of empty
emp
containers uscd tor
charges for tools and equipment.
despato

and Financi ncial Charges:

.
) Charges for a particular product designing et 13. nterensidered
Interest
to be a
part
Interest and financial charge
of cost of rges being a financial charge hall
indirect costs incurred in the productin
erheads: Works overheads are the
no

and Non-r
1al and production.
The terms Ma
Manufacturing Overheads,
Work Overheads
Factory Overheads, DProce and
14.
Abnormal
Non-recurring Abnormal and non-recurring cost arising unusual
Dected occurrence ot events,Cost:
Overheads hav
1ave the same meaning and are used interchangeabiy. Work overhead inolion
clude he such as heavy break due
eting sales below normal level, abnormal idle down of cident, market condition
plants, accidk
following expenses and wastage, payments like VRS, retrenchmentcapacity, abnormal
process loss, abnormal
() Consumable stores and spares. Scrap
of cost of production. compensation, lay-off wages etc. sta not

etc. form the part

2) Depreciation of plant and machinery, factory building
(3) Lease rent of production assets.
9.2 Material Cost [CAS-6
lowing rules are laid down in CAS-6 for measurement and presentation of Material Cost n a
Kepair and maintenance ofplant and machinery, factory building
etc. Thefol
)
activities. cost statement.

Indirect employees cost connected with production

Spares which are specific
to shall not be taken to inventory (i.e. shall not be
(6) Drawing and Designing department cost. an itemofequipment
taken as material cost), but shall be capitalized with the cost ofthe specific equipment.
(7) Insurance of plant and machinery, factory building, stock of raw material & WIP ete
(8) Amortized cost of jigs, fixtures, tooling etc.
Normal loss or spoilage ofmaterial prior to reaching the factory shall be absorbed in the cost ot
balance materials.
9) Service department cost such as Tool Room, Engineering & Maintenance, Pollution control etc due to shrinkage absorption of moisture
3. Losses evaporation and gain due to elongation or
they are
is the expenses incurred relating to the extent
6. Quality Control Cost: The Quality Control Cost
control activities for adhering to quality standards.
quality etc., before the material
normal, with corresponding adjustment in the quantity.
is received shall be absorbed in material cost to

the
material cost shall be converted at the
rate on
7. Research and Development Cost: The Research and Development Cost incurredfo 4. Theforeign exchange component of imported till payment or otherwise
development and improvement ofthe process or the existing product shall be included in the cost date of the transaction. Any subsequent change in the exchange rate

of production. shall not form part of the material cost.

or other
authorities shall not
in or detention charges, or penalty levied by transport
8. Administrative Overheads Administrative overheads to needs be divided relationto 5. Any demurrage
production activities and other activities. Administrative overheads in relation to production form part of the cost of materials.
received/receivable with respect
to any material
activities shall be included in the cost of production. Administrative overheads in relation to and any such payment
6. Subsidy/Grant/Incentive
activities other than manufacturing activities e.g. marketing, projects management, corporate shall be reduced from cost.
cost.
office expen ses etc. shall be excluded from the cost of production. excluded from the material
. Any abnormal cost shall be shall be included in
the
[Tutorial Note: In absence of specifie instruction/ details in an examination problem, defectives which are rejects
8. The material cost of
normal scrap/
Administrative Expenses are assumed to relate to production and included in Cost ofProduction.] manufactured.
material cost of goods
 9.
The Cost Accounting (T. Y.B.Co
10.
material co
material cost of acual scrap/ defectives, not exceeding the normal shall
Material Cost of good production. nal bebeY.B.Com SEM s,
training cost and
eruitmen cost
Costs and Cost
Sheens

11.
as
loss after
Where givingabnormal
a scrap
scrap ldefectives should not be included in material ndjusted
dete value of such scrap / defectives. erial ecost but ina
"ecord"By
shall be assigned
oaher such
conts shall 285

materi al credit prefcasibility

e r m e p r e m

a
t to
the realizable be treaterl
treal and the directly to as verheads and deait with
rerne
specifications
third providedis processed part manufactured by
or third party
a

f Tale ar a ascertained by
is
specific the cont okiect or treate
time ,

12. party shall be by the buyer, the processing/manufacturing chargesOrd

treatedaas part of the materia ges
payablotedintog t
Cast
group of the ci r
idle hourscumst a nce requiring
as orverheads depending
erever cost.

Charges part of ethe manufacturing operations/ activity is subcontracted, th

man I c d overheads dependees.
asemployees. Idle time multiolad
Idle multiplied hy the
2cnuch overtime

13.The costrelated to materials shall

on th cost shalhourlydirect
b e assigned ra topplicabie totthe

subcontrac
causing
be ated as
treated as direct expens mally loaded in the
Emele cost the obyect
suchproduction
cost.
terials like
over a
u
catalysts, dies, tools, moulds, patferns etc., which
ar
malovees mployee
whose time anticipated
m e is
Tor
reasons
cost wh
hke normal lunchtime.
lity and
specific circumstances the
period pe oftime shall be amortized the production
over
units rela
a

Expenses
g r c

attributed .aiving
direct to cost at the
cost
hoBidays
14. The
cost of itcd by Direct
AS-10] obyects
per hour of Empioyee an

useful life of indirect mate.

294
aterial with life exceeding one year shall be included in co are laid down in
owing rules.

15. Direct the material. cost over the Thef o l

CAS-I0 for
s t a t e m e n

Materials shall be incurred for the use of measurement

ur ement and presentation of
i na cost
pirect expensesin
omponents,shall
be classified in the cost statement under
class nished goods and (iv) Sub-assemb
(ii) Semi suitable heads e.g. (i) Raw
including duties and bought out resou
presentation o Direct Expenses
2.9.3 Employee Cost mat erials, pr nts, rebates, taxes and
counts, taxes, and
and d
resources
other expenditure shall be determined at
following rules are laid[CAS-7] duties uoner ivoice
The cdies and fools expenditure
refundable or to be directi
directly attributable thereto net
a cost statement. down in CAS-7 for measurement and presentation of
dow of EmployeeCCostin direct produced internally, the cost of creditea.
1.
ater employee
ative overheads cost, direct of such dies and toois
such
tools will include direct
a d m i ni s t r a t i v e

Employee Cost shall be ascertained taking into account the gross pay including all allowa relating to expenses, factory overheads
ration.
production
Payable along with
the cost to the employer of all the benenis.
& adm c e of
research and
the
case comprising factory inciu agement and
Bomus whether payable
surplus or as
3. In
ment and
and development
in d of or
Statutory Minimum or
as a
in addition to Bonus shall be treated part of the employee cost.Ex-gratia payabl.
as
improvement of the
improvement
Direct Expen ses. the
cost, the amount
process,ne
for the traceabie to sna.
traceable the cost object for
emuneration payable to Managerial Personnel including Denses paid
existing product be included in
officer of a corporate body under statute will be Executive Directors on the
or incurred in
and other
Cost of the
year under reference whether the whole part of
a
considered part of the Em0ard
as
t
pirecnmortized
es. Example:
on the lump-sum
basis of the or which
are in the
estimated output benefit nature of'one time -

pay
hich the benefit Royalty
or the
remuneration is compute or or
percentage of profits. lechnical to be derived

* Remuneration paid to
uted as a will arise in the futureknow-howIn fees, drawing designing trom sue or
ning fees, are paid or
executive directors shall not form part of
non
shall be estimated for the period. such case, the
form part of
Administrative Overheads. Employee Cost
shall but e Accounting period, the charge for
production service volumes
enod and based on volume achieved during the Cost
.
Separation costs related to voluntary retirement, retrenchment, termination of D ortization shall be
tem of
Ifan item Direct Expenses is not determine
over the
period benefiting from such costs.
etc. shall be
amort
5. material, it can be treated as
6. The
ortized 6 Finance costs it in connection incurred with the self part of overheads.
amortized separation costs related to voluntary retirement, retrenchment, and form part of Direct E>xpenses.
generated or ocured resources
procu shall not
etc. for the
period shall be treated as indirect cost and assigned to the cost terminati Direct Expenses shall not include
manner. objects in an appronrio. imputed costs.
7. However unamortized
amount related to discontinuedoperations, shall not be treated as Subsidy/Grant/ncentive
8. Any Subsidy/Grant/Incentive or any such
Direct Expenses shall be reduced. payment received/receivable with respect to any
cost.
emplowe
8. Any abnormal portion of the direct
Employee cost shall not include imputed costs part of the Direct Expenses.
expenses where it is material and
quantifiable shall not form
9. Where
Employee cost is accounted at standard cost, variances due to normal 10. Penalties, damages paid to
Employee cost shall be treated as part of reasons related to statutory authorities or other third parties shall not form part ot
be treated as part
of abnormal cost.
Employee cost. Variances due to abnormal reasons shall
the Direct Expenses.
10. Any
Subsidy, Grant, Incentive or any such payment received or 2.9.5 Packing Material Costs[CAS-9]
Employee cost shall be reduced for ascertainment receivable with
of cost of the cost object to which respect
to any The following rules are laid down in CAS-9 for measurement and
are related. such amounts cost statement. presentation of Packing Cost in a
11.Any abnormal cost where it is material and
12. Penalties, quantifiable shall not form part of the Employee I. Packing Materials are materials used to hold, identify, describe, store, protect, display, transport,
damages paid to statutory authorities or other third cost promote and make the product marketable and communicate with the consumer.
Employee cost. parties shall not form part of
the 2. Packing Materials are
13. The cost offree classified into primary and secondary packing materials.
housing,
shall be determined at thefree conveyance and any other similar benefits 3. Primary Packing Material is the packing material which is essential to hold the product and
total cost of all resources provided to an employee
consumed in providing such benefits. bring it to a condition in which it can be used by or sold to a customer. For example
recovery from the employee towards any benefit Any
employee cost. providede.g.
housing shall be reduced from the Pharmaceutical industry: Foils for strips oftablets/capsules, vials
Industrial gases: Cylinders/ bottles used for flling the gaseous products.
Confectionary Industry: Butter paper and wrappers.
 286
4. Cost Acconting (T. Y.B,.c
primary mg materials shall form part ofthe cost of production. B.Com. SEMM
Cost of of Costs and Cou
Sheets
S.Secondary Packing Material is the packing
customer, promote ables store. to
asion on Salos
c o m m a s l o nc

and otherwise
make
materia etable. transport,i
For example: port, inform E I o c c i l yC
Charges (Factory 29.000
t
forarmaceutical industry: Cartons used for holding strips oftablets and card board DhectorG Plant 96.000
Fo9s
holding cartons. . and Machinen 72 .000
t o

and Taxes Factory

lextile industry:
7atesandTa

6
which yarn is Taxes Office
on fectionary Industry: Jars boxes
Card board used forwrapped RoHales 63.000
woven.
ho chocolates, Cartons containi
biscuits.
for holding
mtaining packs iation

gciation on Furniture
on Plant and
Machinery 18.000
9.600
6. Cost of Salesmen's
peemen's Salaries
45.000
. secondary
packing
packing
Reusable Packing
materials shall form part of distribution overheads. 3.600
50.000
AUH
Fees

Material is the packing materials

that are used more than once to afs time is shared
product. The packing of reusable packing shallitbeis
assigned to the cost ohPack between the
Manewards120%oinclude 18.000
O Ing mate
material
account the number
cost

of times or the perioa ov expected to be reused. object takihen T h e

cane rice is
is of
age.
utv

being
factory and the dffice in the
<
7,500 the
carriage inwards on Plant and
the cost Drica dge 12 ratio
rato of 20 80

Wlustration 1
P i c e

a Machinery
Milk is a) tails pre
ove details
Selling

F r o mt h e a prepare detailed cost

produced in
factory and packed in
a half liter sachets. 100 Sachets
are packa e sheet tor the quarter
t for
quarter ending
metallic
nc
reusable container and the containers
ainer and are transported
to
milk depots in airin each sales. ending 331-12-2014 and ascaran
(T.YB.Com., March 2006, adapted)
trucks, containesate the element of cost unaer which the fa
refrigerated in the depots and sold solution
nas to
classify in reaountancy Standards
the tfollowing items as per Cost 1acion Ms. Avdhoot Enterprises
1. Cost Accou Cost Sheet [For the
of the Sachets Quater Year Ended
Cost of the Containers
ELEMENT OF
COST 31-3-2014)
4.
Transportation Costs
Refrigeration Costs S T E P

Direct Materials
. Opening Stock
Depot's Expenses -

like rent, salary of stam, etc.

6. Cost of
advertising for the milk
(ICWA Inter, Dec. 15,
adapte
Purchases ********* *** 2,70,000
Carriage Inwards 12,48,000
Solution: *** *** *** 48.000
Less: Closing Stock 15.66.000
1. Cost Primary Packing Material Production Overhead Net Direct Materals
************ ***
3,00.000
of Sachets
2. Cost of the
the Secondary Packing Material Selling and Distribution Overhe: Direct Wages
***
*** ***

** ***. 12.66.000
Containers Distribution Overhead Direct Expenses
** **** 3,57,600
3. Transportation Costs Relates to Finished Goods
4. Refrigeration Costs Goods Distribution Overhead C. **** *** ***|

1,20,000
Storage of Finished PRIME CoST .A + B+C1 17,43.600
5. Depot's Expenses Marketing Cost Selling and Distribution Overhead E. Works Overheads:
**| **
*

6. Advertisement Cost Selling Expense Selling and Distribution Overhea Indirect Wages ***
4,000
Managers Salary (20%) *** ** *** * 14,400
Fuel 6,000
3. ILLUSsTRATIONS Electricity * * * * **
72,000
Repairs Plant 63,000
Factory Rent etc. 18,000
3.1 ELEMENT-WISE COST SHEET
*** ***** ** ***

Depreciation Plant 45,000

Total Works Overheads 3,32,400
llustration 2 (Stock of Materials)
From the books of accounts of M/s. Avdhoot Enterprises, the following details have been extracted
wORKS CoST[D+E]1 *** ***
20,76,000
forthe Quarter Ending 31-3-2014 G. Administrative Overheads
60,000
Salaries to Staff * * *"

Particulars Manager's Salary (80%) ** *** *** ** ***

57,600
Stock of Materials Opening. 2,70,000 General Charges
37,200
36,000
Stock of Materials Closing ****' *** '** ***
3,00,000 Directors Fees
* * " ***

9,600
Purchases of Materials |12,48,000 Office Rent etc.
***

3,600
Direct Wages ** ** ** ** **

3,57600 Depreciation Fumiture *** *" *** **

18,000
1,20,000
* * " ***

Direct Expenses * * * '*

Audit Fees 2,22.000
IndirectWages * * ***'*"| 24,000 Total Administrative Overheads
Salaries to Administrative Staf * * * 60,000 22.98,000
Carriage lnwards. 48,000 coST OF PRODUCTION[F+G] ** **

Carriage Outwards ***** '**. 37,500 Sales / Distribution Overheads: 30,000

72,000 Carriage Outward (37,500-7,500) 28,000
Managers Salary ***
*** **
50,000
General Charges 37,200 Commission on Sales
Legal Charges for Criminal Suit ***** *** *'" ** 20,000 Salesmen's Salaries
 288

Total Sales/Distribution Overheads

coST OF
Cost Accounting (7. Y.B. Co
TY.B.Com. SEM Works Overheade
Costs andeCost
Sheets
SALES
PROFIT (Bal. Fig.)(H+ 24 0
office Salarles
Repalr to Plant& Machinerv
praw
L.SALES (120% 24,06,000) [J
* **' ***

28AB131 2
x
Factor Rent,
Rates&Taxes
Working
(1)
Notes +K 2 Plant &
oreciation
on
Machiner
tory Gas and Water Charges
49.000
53.000
Legal charges for preparing9 costs
Facte
Managers Salar 15.000
(2) crim willSuit (R 20,000) be ignored
Camage on machinery will
will be ignored sheet.
sheet while
in cost
Mac Tools Written Off 35.5
7,500
Illustration 3: (Stock y capitaliseo Total Works OH **

be
beWIill and
capitalised so *** ***
**
50000
The following ot RM) ORKS COST ******
for the particulars haveeen books Sohan Manufacturing ce
of M/s. Sohan Manufact Overheads
' ** **"**

2.17.000
been extracted from the
min.

31-03-20014 extracteO Compan

G A d m

year ended 31-03.

"*

ffice Rent,
Rates&Taxes
Conveyance
*** * *
2053.000
Particulars Depreciation Office Furniture
*** *** *

8.000
pening Stock of Raw Materials * *** ****
Directors Fees
15.500
Closing Stock of Raw Materials 2,35 000 office Gas and Water Charges ***** 3,000
Raw Materials Purchase
104025048 0000000 0
* * * *** *
***** *** **. Manager's Salary 30,000
Drawing Office Salaies * **** **
Total Admn. OH
***
* **

*
1.500
10.000
Royalty on Production *** ** OST OF RODUCTION *** *** ***

62.000
Carrage Inwards *** *** ** *. 70 000 H. Sales/Distr. Overheads ..

Cash Discount Allowed ** *** *** ***. 41 000 Calesmen Salary &Commission
* *** ***

2121.000
Repairs to * * * * * *** 17 000 Catalogue Printing
Plant &
Machinery
***
**" *** **" ***

42.000
Rent, Rates& Taxes 53000 Trade Fair Expenses **** ** ** **
10.000
Rent, Rates & Taxes (Factory0 *** *** ***
15 000 Total S & D OH ***** **
10.000
Office Conveyance (Office) * * **** 8, 000 COST OF SALES 62.000
Salesmen's Salaries & Commission
.
15,500 PROFIT (10% of Cost) ** ***
** * .
21.83,000
7,0042,000000
K.
Productive Wages
** *** ****** ***

2.18,300
*********" .
SALES(110% of Cost)
Depreciation on Plant&Machinery **** ** ***

35 500 Working Notes

***** *** * **.
24,01,300
Bepreciation on Office Furniture .. * *** ***

Directors Fees 3,000 Discount is Financial Expense

Gas and Water Charges (Factoryk 30 000 Cash
* * *** ***** *

7 500 office is an
ing
Drawing Engineering ofice, hence part of factory
Gas and Water Charges (Office) *** ******* ***.
3. Manager's Salary
Manger's Salaries
1.500
Cost of Catalogues Printing ***** **
60,000 Total for 48 Hours per week
60,000
Loose Tools Written off *** *** *** ***
*
10,000 For Factory (40/48 60,000)
x
50.000
Trade-Fair Expenses
8,000 For Office (8/48 x 60,000) 10,000
10,000 lustration 4
Out of 48 hours in a week, Manager devotes 40 hours for factory and 8 hours for office per week.
The following data have been extracted from the books of Shri Ganesh Industres Ltd. for the year
the whole year.
The Management has fixed the selling Price @ 110% of cost. 2017

Prepare detailed cost statement for the year ended 31-03-2014. (1. Y.B.Com., Mar. 08, adant
lapted) Particulars
Solution: Stock of Raw Materials 25,000
Opening 85,000
BOOKS OF M/S SOHAN MANUFACTURING COMPANY Purchases of Raw Materials *** *** *** *" ***

Material 40,000
Closing Stock of Raw 5,000
coST SHEET FOR THE YEAR ENDED 31-03-2014
Carriage Inwardsc * * * **

***** *** ** ***.

,000
Wages (Direct) 10,000
STEP ELEMENT OF CoST Wages (Indirect) o ***

*** **.
15,000
A. Direct Materials Other Direct Charges
Opening Stock [Raw Materials] 2,35,000 Rent and Rates: 5,000
* ** *** **

Purchases *** * * * * * * * * *

10,40,000 -Factory d 500

Carriage Inwards * ** *** **
41.000 Office f *** *** *"
500
Indirect Consumption of Materialt 1,500
13,16,000o Depreciation on Plantd
**

**".
100
Less: Closing Stock [Raw Materials] ** *** **"
(2.50.000)
Net Direct Materials **' ** *** *
10,66,000 Depreciation on Office FurnitureF
B. Direct Wages Salary *** *** * * * * ' ***.
2.500
Productive Wages Office 2,000
** *" ** " '**
7,00,000 * *

5,700
C. Direct Expenses Salesman 900
Royalty on Production
70,000 Other Factory Expenses ** *** *** ** **"

12,000
D. PRIME COST 18,36,00 Other Office Expenses *** **" ** ** ***

Managing Director's Remuneration I,000

Other Selling Expenses
 290

B.Com&SEMA
CostAccounting (T. V. B.C Costs and
Cost Sheen
Travelling Expenses of
Carmage
Sales Outwardss Salesman 191
l a r s

of Direct Materials
Advance Income Tax i penmg
Stoc

gress at Commencement
**

Advertisement Paid
** in
h a s eo f D i r e c t
Direct Materials
1 700
e
and Managing .21,100
6.000 to Director's Remuneration
selling departm
is
to e intomat
2000 to the 1oyo n CCo
Wages
Cost 2.86 500
(a) Prime of Sales: (e) Net ot 3.57.000
Cost: (b) Works ProftS
g a l l i n go n C o s t

Solution: Cost: (c) Cost (SYBAF, Oct. 2005, 20os shoins nagement on Cost 199 S00
79.000
INDUSTRIES LTD. Sales 1Ock of Direct Materials 1,10.000
50OKS OF SHRI
GANESH Cosh S l o

vork in rogress 12.50.000

YEAR 2017 75.400
THE osing

CoST SHEET FOR S c r a p

ariageonDirect Material 1.35.600

e Din
STEP ELEMENT OF 1.350
A. CoST
Direct Materials solution: 5.950
Opening Stock [Raw Materials * * * * **
25,000
85,000 coST SHEET
(SYBAF, Oct 2014, sdapted)
Purchases
* * * ***

5.000 ELEMENT OF COST

* * * * * * * * * * * * * * *

Camage iInwards 1,15,000 STEP

i r e c t Materials

Less: Closing Stock [Raw Materials)

****** *** *" ***.

40.000)|
75,000
4. Opening Stock

Net Direct Materials Purchases

61.7700
3 Direct Wages
* * * * *

75,000 Carnage lnward

2.86.500
Other Direct Charges
************

15.000| Less: Closing Stock

5.950
PRIME CoST 3.54.150
*
**

E.
Factory Overheads 10,000
1,85,00 Net Direct Matenials
(754001
Indirect Wages ************
Direct Wages 2.78.750
Rent and Rates 5,000 3. PRIME COST
357.000
Indirect Material
* * * * * * * * * * * " *

500 Work Overheads 6.35.750

Depreciation on Plant ** * 1,500 D. Factory oncost

Other Factory Expenses 5,700 Less Sale of Scrap * ***

1,99500
Managing Director's Remuneration *
***
** ****.
.
4.000 1,350
1.98.150
Total Factory OH Work-in-Progress
WORKS CoST
* * * ***

26.700 Add Opening Stock

G. Administrative Overheads
1,91,700 **
1.21.700
3.19.850
Rent and Rates
**

500 Less: Closing Stock

Depreciation on Office Furniture
* * *** **

100 Total Factory OH 135.600

1.84250
Salary
* * * * * ***

2,500 E. WORKS COST 8.20.000

Other Office Expenses
.

900 EAdministrative Overheads

Managing Director's Remuneration 2.000 Management oncost * * * * * ***
1.10.000
Total Admn. OH
**** ** * ' ***

COST OF PRODUCTION 9,30,000

H. coST OF PRODUCTION * * **
6.000 Sales/Distr. Overheads
Sales /Distribution Overheads
1,97,700 H.
Selling oncost 70.000
**** *** ******

Salary * ** **".
2,000 COST OF SALES * * * *** ***
10,00,000
2.50,000
Managing Director's Remune ration 6,000 J. PROFIT ****** ******

Other Selling Expenses 1,000 SALES 12.50.000

K.
* * * *** *** ***

Travelling Expenses of Salesman ******* *** ***

1,100
Cariage Outward 1,000 Working Notes
Advertisement ...

2,000| 8,20,000
TotalS&D OH 100 829%
***** ** ***

13.100 1. Percentage of Manufacturing Cost to Total Cost= 10 00 0o0 x =

COST OF SALES
K. PROFIT (Balancing Figure)
*** *** *** ***

2,10,800 1,10,000
39,200 100 11%
* *** ***.
10.00 ooo x =
Total Cost
L. 2. Percentage of Management Oncost to
SALES (Given) ** *** *** * ***

2,50,000 70,000 7%
Working Note : Advance x 100 =
Income Tax is a financial item so it will not included in cost sheet. 3. Percentage of Seling Oncost to Total Cost =
100000o
Ilustration 5:
From the following particulars you are
required: (a) to prepare a statement showing the total cost
(b)To state what percentage () the
oncost bear to the total cost of the manufacturing
cost (ii) the management oncost () the seng
goods sold.
 OST Sheets

Wlustration
From the
Particulars
6:
(Stock of RM+
following particulars FG+ W-+P)
prepare
Pepare cost sheet showing vaious
cost
elements of cost
Cost Accounting (7: Y.B.Com

R.Com:SEM- TOTAL C o

(10% x 23,07,930)
PROFIT,
ALES (M+ NJ
ST/COST OF SALES
293

23.07,930o
s
Opening Stock of Raw Ouanti oroduced= Quantity Sold 2.30.793
Purchases of Raw Materials VolOs
count not recorded is
25,38.723
Carriage Outwards Materials 8,1,2150 000 Usration.
T a d ed i s c

as
***** *"**

of RM+FG W4+P)cost.
Direct Wages * *********
gtlon7 : (Sto,

4,228500
Direct Power following
particulars
prepare a cost
Technical Directors Salary 1 400 t h eyea7ended
anded 31st March, 2014
sheet
eet
Factory ******* *** **.

25,A0 359040 showing the compone

Sale of Rent, Rates & Insurance
onents of total costand profit
Factory
* **
tcuars
Depreciation on Scraps
Factory Buildings
* **" *** *'** '*

10,1,144000 cIOckofn i s h e d gd goods on 1-4-2013

nished goods on 31.-3.
Closing Work in Progress * ** *** ** 15 200 S1oCk
-4-2014
on
Factory Stationary ***** *** "
1,20,2 ff ramaterials
raw
on
materials
2013 6,000
31-3-2014 15.000
m a t e r i a l s

Opening Stock of Finished Goods

Stocko

4512340
****** *
raw
ckof 1-4-2013
** ** **" '*
on
40,000
Closing Stock of
Fees to Brand Raw Materials
280
Worki
in
progress
np r o g r e s s
31-3-2014 50,000
36,920 k
Mork

and Ambassador
ofraw materials 15.000
Stationery
Staff Salaries
Printing ***** *** **
2,012,0,020000 Purchases
C a m a g ei n w a r d s
*** *** **
*** *** ** *** 10.000
* *** ** .*
4,75,000
Trade Discount
Office Rent
**** **

** * 6,30,000
1,20,000 wae Manager's Salary
Vages
**** ** ***

***| 12.500
1,75.000
Free Sample Expenses 60 000 Employees Salaries ****** *** *** *

30,000
FacloryRent, Taxes & Insurance

Closing Stock of Finished Goods

20,320 *** *** *** 60.000
50240
Facto.

expenses
* * * ** *** 7,250
Sales are made to (T.Y.B.Com., Oct. 2006, adan powroduction expenses
9,500
eam profit@ 10% on
Cost Price. ear
- * . ** ** ***

Solution
O t h e r

for
the ye a,
****** *** *** *** 43.000
Sales 8,60,000
n c o m et a x
Cost Sheet *

pividend received
5,000
STEP ELEMENT OF Interest on d e b e n t u r e s 2,500
coST Sinking Fund
***** ** ** **

,000
A. Direct Materials: * * * *** ***

Transfe
oodwill written off 20.000
Opening Stock 1,10,000
10,500
Purchases * **' ***.
8,25.000 S e l i n g E x p e n s e s

16,000
9,35,000| *** *** *** *****
GeneralE X p e n s e s

32,500
(36.9208,98,080
***

Less: Closing Stock * * * ** ** ***

S o l u t i o n :

3. Direct Wages ****** '** *" '*

4,21,400 Cost Sheet [For the Year Ended

C. Direct Expenses (Power) * * * ***

25.840 31-3-2014]
D.
E.
PRIME COST [A + B +C]
Works Overheads:
|13,45,320 STEP ELEMENTOF COoST
Technical Directors Salary **
*'* *** **"

40,590 A.
Direct Materials:
Factory Rent, Rates and Insurance 10,140 Opening Stock 40,000
Depreciation on Factory Building ** ** *** **".
75,200 Purchases ** ** *** *** ** 4,75,000
Carriage Inward
Factory Stationery * * * * *** **

12.340 *** *** *** **" "

12.500
5,27,500
1,38,270
Less: Closing Stock (50.000)| 4,77,500
Less: Sale of Scrap (1.460) 1,36,810 * ** ***

1.75.000
Work in Progress: 3. Direct Wages ** *** **" * *

PRIME COST [A + B] 6,52,500

Less: Closing Stock of W-1-P
1.20.260)
*** *** **.

C.
G. WORKS CoST [D+ E+ F] Works Overheads:
*** '** 13,61,870 D. 30,000
H. Office/Administrative Overheads: Works Manager's Salary *** *** **

Printing and Stationery Factory Employee's Salary *** *"** " 60,000
12,200 7,250|
Office Rent 60,000 Factory Rent, Taxes & Insurance ** ** *
9 ,500
Staff Salaries 630.000 7.02.200 Power Expenses
cOST OF PRODUCTION [G+ H]
*** *** ** '* *

Other Production Expenses

*** *** *** * ***

43,000
Finished Goods:
*** *** ** ****

20,64,070 E. Work in Progress:

1,49,750
***** *** *** *** 15,000
Add: Opening Stock Add: Opening Stock (10.000)1.54.750
* * ***
45,2
Less: Closing Stock 8,07,250
Less: Closing Stock
|21,09,350
WORKS cOST[C+ D+E]
K. cOST OF GOODS SOLD [I+ J]
* * ** **
(50,240) G. Office/Administrative Overheads: 32.500
L. Sales/Distribution Overheads:
** *** "**
20,59,110 ****' *** *

8,39,7500
General Expenses
Carriage Outward
28,500 . COST OF PRODUCTIONIF +G]
Fees Paid to Brand Ambassador
Free Samples
**** *

2,00,000
** * **

20.320 2.48.820
 .
Finished Goods:
Add: Opening Stock
Cost Acconting (7. Y.
B.Com afion of ots and Cot
a r s i i r a n n

Sheen
Less: Closing Stock * * **
MA Cariage Inware

Cu
tom duty && Octrot
195
.
K. COST OF GOODS 989 Closing Stock
Sales/Distribution SOoLD [H+ )
Selling Expenses Overheads 50.G00
Direct Wag
16 0 ono
M. COST OF
SALES .J+ K ** *"" ***| O.301 rect Expenses
PRIME CoST (Speclat Des 1.85.000 14,15.000
N. PROFIT 0works Overheade 12.00 000
8,10.240
46,0705
** **"**|
SALES [L +M] Power 50.000
2665. 000
Note: * * * **' ***
Factory Rent
Foliowing a rare
debentures, 4.items
Factory Electricity
On

Transferexcluded
to SinkingtromFund, 5. Dividend received
e excluded from Cost Sheet: 1. Income tax, 2. DIvidend
recelved, 3. Ihte pepreciation on Plant&
79.000
Wlustration8:
From the
Gooaw Factory Salaries
LessSaleof Scrap
Machinery
foliowing infomation. prepare
prepare detailed
detaliea Cost Statement for the year ende
nded 31-3-20 wORKS CoST
52.500 3.42.000
*
Particularss e/Administr
Office Rent
stratlve Overheads
7300334S00
Opening Stock Raw Matenals Telephone
29.99500
- Finished Goods
Office Electricity 50 00o
Purchases of * * ***

20,000 18.000
Direct Wages Raw Materials 30 000 Salaries
** ***

vw***** ** 5.000
15,00,000000
**

Power Establishment expenses

Camage
Cost of a
on Purchase of
Raw Materials
1200,
99 500
Directors fees
COST OF PRODUCTION ***
*

***
*** ***

** ***
***
125 0O0
50.000
60.000 3.18.000
Special Design 20 000 Finished Goods
Custom Duty and Octroi on Raw Matenials *** **
**
50,60 000000 Add: Opening Stock 33.17.500
**"
Rent and Rates ** *** ***

Office 30.000
Less: Closing Stock
- Factory
50,000 33.47 500
Telephone Expenses **** ** *** 70000 cOST OF GOODS SOLD
90.000)
Advertisement *** *** *** **"**
30 000 Selling & Distribution Overheads ***

33.17.500
Electricity - Office 75,000 Advertisement

Factory 15,000 Depreciation - Delivery Van *** ***

5.000
Machinery Lost in Fire *** * *** *" ** 30,000 Salaries * * * *** *
20.000
Depreciation Plant and Machinery * * *** ,00,000 Establishment expenses 62.500
50.000
- Delivery Van 80,000 Showroom Rent
***
***

Income Taax 20,000 Telephone 65.000

,20,000 12.000
** *** *** **n

Salaries Mailing charges

Donations
* *"***
2,50,000 TOTAL COST/ COST OF SALES
* * *** ***

10.000 2.94500
* ***
70,000 PROFIT (20% on S.P.) 36.12.000
Establishment Expenses M *** *** * *** *

9,03.000
Rent of Showroom ,00,000
*** *** *** ***

'*
65,000 N. SALES * **
45.15.000
Interest.on Loan
45,000
* **' ** '** ***

Sale of Factory Scrap lustration 9

Dividend Received 7,500 From the books of accounts of Viburaj Enterprises the following details have been extracted for the
Directors Fees
17,500 31st March, 2014.
*** *** ** ***
'* 60,000 year ended
Mailing Charges of Sale Literature 10,000 Particulars
Closing Stock Raw Materials 1,85,000
- Finished Goods Corporate Manager Salary 11,10,000
30,000
* * ***
** *** ***

Rent of Plant ***** *** *** ***|

1,27,500
Other Information Sale of defective Raw Material ***** * * * *** * 8,500
(a) 60% of Telephone Expenses relate to Ofice and 40% to Sales Department. Hire charges for special equipment **** *"*** 57,000
84,700
(6) Salaries to beallocated to the Factory, Office and Sales Department in the ratio of 1:2:1. Ofice Rent *** ** *** ** **.

4,85,230
C)Establishment Expenses are to be apportioned equally between Ofice and Sales Department Purchase of Raw Materials
* * *** ***. 24,325
(d) Sales are made to ean Profit 20% on Seling Price. Carriage Inwards
(T.Y.B.Com., Oct. 10, adapted) * * * *** *** 2,35,600
Indirect Materials ,000
Solution ** * **
*** ***

Office Expenses 22,600

Insurance premium for stock of Raw
Material *** ***
coST SHEET * * * * * * * * * * *** 12,700
Insurance premium for computervan ** 11,500
STEP ELEMENT OF CoST Insurance premium for Delivery 78,175
A. Direct Materials Opening stock of Raw Material ** *** **** * 76,230
Closing stock of Raw Material 16,800
Opening Stock *** *** *** ** *"
20,000 Sale of factory scrap 1,10,000
Purchases
15,00,000 Carriage outward
 296

Depreciaattiioonn on Comput
Depreci on
Delveryervan
Cost Accounting (I, .B. Com
ofCote and Cou
Sheen
Salaries to
office stat
Salaries to Drawing
SEM oistr. Overhende
mauwanco. delivery van
B a l e

outward
Opening work in and Designing
Closing
Canlagn

oprocntion. ion delvery Van

Remuneration departne
work in progress nt
Brand Ambassador nefatlon brand ambassad
Direct wages progress 94
P o m

catalogue
nting

Skilled labour prrdelvery van

Ropare
9 900

Cost Unski
of l ed labour
&D OH
tal S

Openingcatalogue printing 3,16, 000 10OF SALES 97 500

stock of finished
Closing stock 124$7 0000 COS
207% 01 Cosn
of finished goods PAOFIT 12.500
Repairs to Delivery van goods SALES
o6.15.900
Other Information: 35 500 uatration10 10: (Hldden Informatlonj 7.23.180
43.39 040
1. The
corporate Manager's salary to be apportioned between the factony and the office inh
of 1:9
gyom

information, prepare acost

t h el o l o w i n a .

sheet for the

2. morth
Selling price is 120% of Cost Prce. cuars

an Hand
1St
Dec. 2014
of
Oecamber. 20 14
From the above
details
detais Cof Sheet showing various elements of cost.
Materials

Solution:e prepare Cost

prepare AawM

T.Y.B.Com.,
Work-in-Progress

Oct. 2012,
dapted
F i n i s h e dG 0 o d s

COST SHEET
25.000
Materiais Consumed durino
ELEMENT OF COST RawM
teriashe month (ater Dec. 2014
Cost for the
8.200
17300
A. Direct Materials
HoKs
of Goods sold
C o s to f P r o d u c t i o n adjusting work-in-progress) " *** **
,800
ofRaw Materials 48 400
Opening Stock *
*** *" ** **.
78,1175 1se
e on urchases * ***
53.200
Add: Purchases *** *" ** ** *.

4,85,230 1.900
Camag
Finished Goods
Add: Camiage inwards *** ** *". 24,325 1.100
Less: Sale of defectives ** *** ***

(8,500)
D i e c tW a g e s

72.300

B
Less: Closing Stock
Direct Wages
* * * * *** *** **"

(76,230) 5,03,000 D i r e c tE x p e n s e s

F a c t o n yO v e r h e a d s
17200
1200
verheads
Administration Overh
9.100
Skilled Labour * * ** *** *
3,15,500 * * *

Distribution Overheads 3.200

C.
Unskilled Labour
Direct Expenses
****

1.24.5004,40,000 Selinga n d .

Solution.
4,200

Hire charges Sp. Equipment *** *** *** **' ***

57,000 Cost Sheet tor the Month

D. PRIME COST of December 2014
10,00,000 COST
E. Works Overheads STEP ELEMENTOF
Corporate manager salary (1/10) 1,11,000 Direct Materials
Rent of plant 1,27,500 Opening Stock of Raw Materials
Indirect Material *** *** ** **' **
2,35,600 Add: Purchase of Raw Matenals 25,000
Insurance raw material stock * * " " *** *** ***

22,600 Add: Carriage on Purchases

**** *** ***

21,900
1,85,700 1.100
Salary drawing &design *** ** ***
48,000
Less: Sale of Scrap (16,800) Less: Closing Stock of Raw Materals (Bal. Fig,) (48,000-21,800)
26,200
W-1-P Cost of Raw Materals consumed ** *** *** *** * 800
Add: Opening Stock *** ** **
94,300 B. Direct Wages a * 17.200
Less: Closing Stock ****" * **" '**

(96,500)| 6,63,400 C. Direct Expenses * ** * ***

1200
D. PRIME COST ,200
F. WORKS coST 16,63,400 E. Factory Ove eads
***

*** ** ** *
** **

9.100
Admin. Overheads Gross Works Cost *** ***
49,300
Corporate manager salary (9/10) * * 9,99,000 Work-in-Progess
Office rent *** *** ** **
84,700 8.200
Add Opening Work-in-Progress ** ** *** ** **

,500
Office expenses 41,000
Insurance computer 12,700 (57,500-48,400) 9.100
Less: Closing Work-in-Progress (Bal Fg,) 48,400
Depreciation computer *** **' * **' **
87,300 G. WORKS COST 3,200
Salary office staf 1,15,300 H. Administratlve Overheads *** **
516600
Total Admn. OH **' **' '** **"
13,40,000 COST OF PRODUCTION
Goods
*** **|
17.300
H. COST OF PRODUCTION 30,03,400 Add: Opening Stock Finished of 68,900
(68,900 53,200)
15.7
. Finished Goods Goods (Bal. Fig.) 53,200
Add: Opening Stock 6,40,000 Less: Closing Stock ofFinished 4200
* **' *** **' ***

COST OF GOODS SOLD *** *** * *"

Less: Closing Stock of Finished Goods *' ** **' *** **

(7,50,000 and Distributlon
Overheads
A. Selling
J. coST OF GOODS SOLD 28,93,400
 COST OF SALES Cost Acconting (T7.
N. PROFIT (Bal. Fig.) V.B.Co
om.t SEMA
SALES iat Df Coste and
Cou she
Note: Since
nfoa
Sheets
the
closing stock of raw $7A
Usingquestion,
ewlars
the extratheyinformation
must be Ofou materials,
materials. work-in -progress
w lres at the and finished
Materials

goods sold. goods 299

Partieulars
R a w
M

Ound as, Balancing Figures' at respective stages in thO eroducth Wages

33 000Nater 9uop
given like material consumed, ds COst and cost of he cost sh Qven ductive Wages
3.2 COST PER UNIT wort

produeUcton
proo
t o r yR e n t
and Taxes 35
000
Fartory
10.1 500 0Miee insuranra
500 Legai tnauranen
Lighting
ctoryL i 200
lustration 11:(Royalty, Works FactoryHea
eating
2.200 Direct Espense
1 199

1500 Pent ofExpenge

500
Dunkel Works OH Machine
FaPower

about itsLtd. Started a tactory

Molor
Havlago A00

Raw activity during

in Navi Mumbai on
April 2013. Following details
1st
r s Fees .

Works A00
3,000
Warehouse
Depreriation 3.020
Material the ear ended 31st March, 2014 details are furr DirectorFees Office
Direc

Depreciation of Plant &

on OMice Machinery
300
Direct Wages consumed 40.000 units 7 per unit.
-

wrrlehed Cleaning
FaCOffice Expenses
,000
2.000 Depreciation
Bad Detts DelrveryBlg
on
2.000
.000
(a) Skilled 500 Adverising Vans 200
(6) Unskilledworker 9 per unit ory Stationery
200 Sales
100
Royalty (on rawworker 76 per unit
F8 Stationery
oftTools Written Of 750 Department.
UpkeepCharges
of Salary
300
1500
Works overheadsmaterial consumed)
Loose

Rent Taxes Office 900 Bank Delivery Van 700

3 600
Machine Hours 78 per
machine nou Per total output f the 500Commission on Sales
Office Overheads worked 25,000
Note: Th
period has been 1.500
Sales at1/3rd of Works cost.
Solution:

15.000 tons
Commission@
Units produced 40,000.74 per unit. Cost Sheet For (SYBAF, Feb. 2006. adapted)
the Year
ended
OcK Of
Sale price
Units
is 50
at the end:

per unit.
4.000 units to be valued at cost of production per unit. TEP ELEMENT OF COST
Output-15,000 to31st
ns) March, 2013
epare cost sheet
showing the various elements of cost both in total and per Total Cost
Solution: unit. Direct Material: Raw Mateñal. Cost Per To
SYBAF, Nov. 2017, A pirect Labour: Productive Tons
DUNKEL LIMITED adapted C. Direct Expense Wages ****** 33.000 2.200
Cost Sheet For the Year Ended 31-3-2014 D. PRIME COST **
**

35.000 2.333
E. Factory Overheads: ***** *** * 3.000 0.200
Output: 40,000 Units] 71,000 4.733
Unproductive Wages
STEP ELEMENT OF Factory Rent and Taxes ***
***

COST 10.500
*** ***
***

Total Cost Units

Unit Cost Factory Lighting ***** *.
7500 0.700
No. Factory Heating
** *** *** ***
0.500
A. Direct Materials 2,200 .147
Motor Power 1,500
Raw Materials 0.100
B. (40.000 x 7) 2,80,000 Haulage 4,400 0.294
Direct Wages 40,000 Director's Fees (Works)
*** *** ***

7.00 3,000 0.200

Skilled Workers (40,000 x 9) Factory Cleaning
*** ***
1,000 0.067
3,60,000
Unskilled Workers (40,000 x 6) Factory Stationery
** ******
500 0.033
C. Direct Expenses 2.40,000 6,00,000 40,000 15.00 Loose Tools written off
* * *" 750 0.050
Royalty 600
* *** ** ***

on Raw Materials (40,000 x 3) Water Supply 0.040

P. PRIME CoST 1.20.000 40,000
3.00 Factory Insurance
***** *** ** ***

1,200 .080
Works Overheads (25,000 x 8)
10,00,000 40,000 25.00 Depreciation of Plant and Machinery 1,100 0.073
WORKS CoST 2.00.000 40.000 5.00 F. WORKS COST 2.000 36250 0.133 2.417
G. Office Overheads (1/3 of Works
Cost)
12,00,000 40,000 30.00 G. Office Overheads
** ** *** ******

1,07,250 7.150
H. COST OF PRODUCTION 4.00.000 40.000 10.00 Director's Fees (Office) 2,000
Less: Stock of Finished Goods 16,00,000 40,000 40.00 Sundry Expenses 200
0.133
0.013
(4,000 x 40) Office Stationery 900 0.060
1.60.000
** *****" *"*

COST OF GOODS SOLD 4.000 Rent and Taxes 500 0.033

K. Sales Overheads: 14,40,000 36,000 40.00 Office Expenses **** 500 0.033
-Sales Commission (36,000 x Legal Expenses 400 0.027
4) * " * * ** *** ***

L. COST OF SALES 144.000 36,000 4.00 Bank Charges ** **"*** *** 50 0.004
M. PROFIT |15,84,000 36,000| 44.00 Depreciation of Office Building. 1.000 5.550 0.067 0.370
N. SALES 2.16.000| 36,000 6.00 H. COST OF PRODUCTION 1,12,800 7.520

llustration 12
18,00,000 36,000| 50.00 . Sales Overheads:
300 0.020
Rent of Warehouse 0.013
From the 200
following paticulars prepare a Cost Sheet showing the cost Depreciation of Delivery Vans 0.007
forthe period ended 31st March, 2018 per item and total cost per ton Bad Debts *** *** ***
100| 0.020
300
Advertising 1,500 0.100
Sales Department Salaries
*** *"" "** *** ***
 300
osts and CoM
Accounting (7. V.B.Com Sheen
Upkeep of Delivery Vans
Commission
TOTAL CoSTon Sales
CoNt
700
1.500 4,600
.Com.:SEM
0.047
0.100
T h er a t e

onlyi
iornent hiee
26 working dayscharges has
heen
Wlustration 13: ****
1,17,400 ration 14;:0
14: (Dual Prlcing) gvon on per dy
n
a cost (Computing each
Government grante Herce hey have been
Prepare
Mills sheet Element ot Cost) that 40% of the out
Ltd. for showing the total
monthOWing total and per cost of paper manufactured by Tim
proft eamed the
a t o t o n and the balar
per tonne
2014. There tonint
ugar Lid
by the a rMarch,
of c h , 2014. There m
were 26 working days in the month. Ale
h. Atso finPda Sweet Sugar Ltd. for the mannytarcture and
Direct Raw materials:company. The details are aswe pe
SG00
delails
tons
ten ear
be sold
Govemment cartroled
J,600 tons
Or
.nb
oreegries of af a of
Paper pulp
Direct labour. 6.000 tons 900 tonne.
ungthe
an Sugarcane
825
year ended 31st March, areet af any grice Following
per tonwas consumed
bour amounted
2014
afe

280 Skilled workmen ils f

medelais expenditure sugar preduwe
other 10D Der are as on
300 Semiskilled workmen tollows
250 per day Patieulars
470 Unskilled workmen 150 per day o u r e c tE x p e n s e s

Direct expenses 100 per day rges

e l e p h o n eC h a r g

Special equipments hire 1eecomputer purchased

i c e(
nd Insurance 4.20.000
Special dyes charges 12,000 per day
1ory
Rent
and
3.52.896
250 per tonne of total raw material input purchased
Work overheads: Variable
M a c h i n e r yp u r c
F a C

2.75.350
chinery Repairs
50% of direct wages 3.54 760
on Sales
Fixed 2,70,000 p.m.
n m i s s i o n oon
425 580
Administration overheads 12% of works cost
F a c t o r yS a l a r i e s
98 347
Selling and distribution Outward 3.37 850
Opening stock of paper Overheads
8 0 pertonne sold.
500tonnes valued R2,501.60 per ton
Carnag
P a c k i n g E X p e n s e s

2.19.588
Closing stock of paper 300 tonnes valued at cost of production.
B a n kI n t e r e s t

1.54 090
The paper sold
is
Factory Electricity
1.94 450
73,000 per tonne. nelivery van Expenses 1.86.896
Solution: C o a l C o n s u m e d 2.81.880
TIMES PAPER MILLS LIMITED Depreciation on achinery * * * 1.06.850
on Computer 3.80.125
preciation
Cost Sheet For the Month Ended 31-3-2014 2.49.500
STEP ELEMENT OF neoreciation on Delivery Van * * ***
2.04,180
COST Total Tons Office S a l a r i e s

Cost
Cost per Printing and Stationery
1.57.380
1.89.325
ton
During the year 2,400 tons of sugar was 1.13.000
A Direct Materials: anany's Profit target for the year, forproduced.the
Raw Materials (6,000 x
900) 54,00,000 6,000 et 10% of its average paid-up Captalfoing open market selling pnce on
o the basis of cost
3. Direct Wages: 00 of 7 1,42,56,00o.
Skilled Workmen (280x 250 x 26)
ateCost sheet and tind vanous components
Prepare
of total
18,20,000 Price for Open-Market. cost and per unit cost and
Semi-skilled Workmen (300 x 150x26) Seling (.Y.B.Com., April 2000, SYBAF, suggest the
-

Unskilled Workmen (470 x 100 x 26)

11,70,000 Solution
Oct 2012, adapted)
C. Direct Expenses: 12.22.000 42,12,000 6,000
702 SWEET SUGAR LIMITED
Equipment Hire Charges (12,000 x 26) 3,12,000 Cost Sheet For the Year
Special Dyes (250 x 6,000) 15.00.000 18,12.000 Ended 31st March 2014
6,000
PRIME COST
Works Overheads 1,14,24,000 6,000 302 [Output: 2400 Tons]
1,904
Variable (50% of Direct Wages) STEP ELEMENT OF COST
- Fixed 21,06,000 Total Cost Cost Per Ton
F.WORKS COST 2,70.00023,76.000 6,000
396 Tons
G. Administrative Overheads 1,38,00,000 6,000 Direct Material : Sugarcane .
2,300 **

36.00,000 2,400 1,500

(12% of Works Cost) 16.56.000 6,000 276 Direct Labour
19.80,000 2,400 825
H COST OF PRODUCTION C. Direct Expense
4.20.000 2,400 175
Add: Opening Stock of
Finished Goods
1,54,56,00o 6,000 2.576 D. PRIME COST * * * *"

60,00,000 2,400 2,500

(500 x 2,501.60) E. Factory Overheads:
12.50.800 500 Factory Rent 3,54, 60
J. Less: Closing Stock of
Finished 1,67,06,800 6,500 Coal Consumed 3,80,125
(300 x 2,576) goods 7.72.800 Factory Salary 2,19,588
300| "*** ***
K COST OF GOODS SOLD Machinery Repairs ***** **" *" **"
98,847
L. 1,59,34,000
M.
Selling&Distribution O/H (80 x6,200) 6,200 2,570 Factory Electricity 2,61 880
249.600 15.64.800
COST OF SALES 4,96.000 6,200 80 Machinery Depreciation * * ***
2,400 652
N. PROFIT 1,64,30,000 6,200 2,650 F.WORKS COST ** *" **"
75.64,800 2,400 3,152
SALES 21,70.000 6.200 350
1,86,00,000 6,200| 3,000
302
fran af Costs and Cost
G.
Office Overheads Cost Acconnting (T. V.B.Com Sheet
Closing Stock of
Salary
Printing and Stationery 1,89,325
EMAY LOs

Net Direct Materiala

Raw
Materias
Telephone **** ** **
1,13.000 rect Wages
pire 115.090
Depreciation on Computer
COST OF PRODUCTION
****
3,52,695
2.04,180859.200
2,400
Dlre

PAIME COST
Expenses
2 50 000 19 00 2500
Sales Overheads ****** * * 84,24.000
2,400 1.19000 11 0
***** *** *
works Overheads
Commission 3510 Rent 10.000
Camiage Outward * *
3,37,650 Facte
Depreciation Plant 4.50000 10.000 5.00
Packing Expenses 1,54,090
1,94,450
Indireo Materials &Machinery .

Delivery Van Expenses **** *** * *

1,06,850
a l e r i a l

handling Charge ***** ***** 35.000

19.000
.000 3 50
Depreciation on Vans
COST OF SALES ***** *** *
1.57.3609.50,400|
2,400| Store eper's Salary ******
26.000
19.000
19.000 2.50
Less Sold to **
93,74,400 2.400 Total Works OH
*** 11 .000 10.000
Govt. (960 28,80.000 960 3,906 9.000
tons x3000) 64,94,400 1,440
wOAKS CoST . 10.000
PROFIT (10% ** **
14,25.600 Admin. Overheads 1.00.000 10.000 19.00
SALES (Open ofMarket)
1,42,56,000).. * * *
79,20,000 1,440 Sundry Expenses 5.50.000 10.000 55.00
llustration 15
(Working back sales)
5500 Repairs to Oice Fumiture
Audit F e e s
*** 18.500 o.000 35
Following details are fumished by K.K. Ltd. of expenses incurred dunng the yearended 31st h Office salaries 12.500 10.000
2014.
March Oraciation- Ofice Equipments 11 500 10.000 5
Total Admn. OH *** ***** 27 500 10.000
Particulars coST OF PRODUCTION 10.000 10.000
Direct wages ***** H. 80,000 10.000 8.00
Purchases of Raw materals 1,10,000 S: Closing Stock of Finished 6,30,000 10.000 63.0
Goods
Factory Rent
Cost of Catalogues
**** ******|
***

* * ** 240000
35,000
cOST OF GOODS SOLD
(31.500) (500) 63.00
sales/Distr. Overheads
*** *** *** *** ***

17,100 5,98.500D 9.500 63.00

Sundry Expenses Cost of Catalogues
Depreciation on Plant and Machinery ***** ** 18,500 Carriage Outward
Opening stock of Raw materials *** *** 19,000 Distribution of free samples
17,100 9.500
Repairs to office funiture * * * ** '* 25,000 Demonstration Expenses *****"
25.650 500
Carriage outwards * * * *** * 12,500 Commission on Sajles
13.775 9.500 45
25,650
*** ** ***
300 500 1.40
Interest on Loans Total S&D OH
Closing stock of Raw materials ** ****** ****** 12,700 *
15.675 9.500 1 65

Distribution of Free samples 15,000 coST OF SALES 85.500 9.500 9.00

Audit Fees *** ***** *****

,775 PROFIT (25% on Cost)
*** ** .

6,84,000 9,500 72.00

Demonstration Expenses * ** *** **
11,500 M. *** ***
*
1,71,000 9.500 18.00
Fumiture Loss by Fire 13,300 N. SALES

Indirect Materials
. ...

8,000
Financial items -

Interest
** *** *

8,55,000 9.500 90.00

*** *** *** ** ***

26,000 te:
Note on Loan, Furniture lost by fire,
Office Salaries Machinery purchases are to De

Store keeper's salary

**** * **
27,500 ignored
*** *** *** *** '**

9,000 ilustration 16
Depreciation on Office Equipments
10,000
*** *** *"

Eollowing details are Turmished by MBA Ltd. of expenses incurred durning the year ended 31st March,
Commission of Sales
Direct Expenses 15,675 2014.
90,000
***** *** *** *"

Material Handling Charges

11,000 Particulars
Machinery Purchased * * '

** ***
**. 1,40,000 Direct Material 3,40,000
Other Information: Opening Stock of Finished Goods (1,000 units) * ** ***** *** 85.250
(a) Stock of finished goods at the end 500 units to be valued at cost of production. Closing Stock of Finished Goods (2,000 units)
(b) Number of units sold during the year were 9500. Depreciation on Plant and Machinery ** *** *** * * 96,000
(c) Profit desired on sales is 20% Loss on Sale of Machinery * * * ***** ***
17,500
Prepare Cost Sheet showing the various elements of cost both in total and per unit and also find out Trade Fair Expenses * * * * 85,500
the total profit and per unit Direct Expenses 1,60,000
profit. (T.Y.B.Com., April 2010, adapted) ***** **"
3,80,000
Solution : General Manager's Salary
Dividend Paid * * *** ** 7,,800
coST SHEET 2,60,000
Direct Wages
****** * **"

1,85,250
STEP ELEMENT OF COST Total Units Per Unit Advertisement
***

**
****

******
*****|

* 1,72,000
A. Direct Material Depreciation on Computers *** **
54,000
*** ****
Opening Stock of Raw Materials Drawing and Designing Expenses 1,90,000
Purchases of Raw Materials 25,000 Purchase of Machinery 1,14,000
*** **'
** **
** 2,40,000 Depreciation on Delivery Van
**** ***
 304 (osts and Cost
Sheen
Office Maintenance Charges
Cost Accounting (1. ). B. Com
Y.B.Com. SEM wpacaton on Computer

Factory Rent
Sales (19,000 Units) .80 000
g c tMalen
alorials

on
lant and Machinery
/12.12 9
1,50 000 yertisemenis 131900
Closing
TOu
Stock ot Finished
are Goods to be valued at Cost of Production. cost both in total
Oods
22,2880,000 MCeSa/ay
eWages
77100
15.33.750

and also required to prepare Cost Sheet showing varnous elements of olal and per c tMateials 791,700

Profit and Per Unitshowing

find out Total v cExpenses 1901 000
Solution Protit. unt k of finished goods (3000 1882.400
2014, SYBAF,March 2018
(T.YB.Com., March 2011, Oct.
dapted) r
s n g
S t o c k

Information:
units) 4 96 500
Cost Sheet
a finished
STEP ELEMENT OF CoST Units Rate Per
1 . C l o s i n gs l o c

goods to be valued
Unit Total asired on sales is 20%.
old
at cost of
production
v u m b e ro f
during the year was
Direct Materials 20,000
20,000
17.00
13.00
3,40,000 P r e p a r eC
heet showing the
o

25,000
ostd per unit various elements of
Direct Wages
8.00 2,60,00 profit for the year
ar
cost both in total
60,000
p r o f i t

20.000 and per

Direct Expenses total

ended 31st unit

e
March. 2014
* * * * * * * * *

ne
D.
E
PRIME COST
*** *** ** *
20,000
38.00 7,60,000 Soution
(T.YB.Com., Mar. 12. adapted)
Works Overheads coST SHEET
20,000 4.80
Depreciation Plant and Machinery * * *** ***

20,000 2.70 96,000 ELEMENT

OF COs
Drawing and Designing Expenses ** ** *** "
54 O00
Factory Rent * * *
20,000
7.50 1,50,000 STER Total Units Rate Per Uinit
Total Works Overheads 20,000
15.00 3,00,000 Dire Materials

WORKS CoST
20,000 53.00 10,60,00 Direct Wages 18,82,400 26.000 724
G. Office/Administrative Overheads Direct Expenses 10,01,000 26.000 38.5
General Manager's Salary ** *** ***
20,000 19.00 3,80,000 PRIME COST 496.600 26.000 19.10
Depreciation Office Equipments **
* * * * * * * * * * *
20,000 8.60 1,72,000 Works Overheads 33.80,000 130.00
Office Maintenance 20,000
9.40 1,88,000 EIndirectWages
| 9,76,300
20,000 37.00 7,40,000 Works Manager's Salary 26.000 3755
Total Administrative Overheads * * ***

20,000
Indirect Materials |11,94,700 26.000 45.95
H. coST OF PRODUCTION
Finished Goods
90.00|18,00,000 Total Works Overheads
7,31,900
nepreciation - Plant&Machinery4,77.100
26,000
000
28.15
18.35
1,000 85.2
Add: Opening Stock * *** ***

85,250 wORKS cOST 33,80,000 26,000 130.00

Less: Closing Stock * * " * * * * * * * *
(2,000)
19,000
90.00(1,80,000)
89.75 17,05,250 Office/Administrative Overheads 67,60,000 26.000 260.00
COST OF GOODS SOLD *** *** * * *
G. Director's Fees
K. Selling & Distribution Overheads Repairs Office Furniture 9,73,700 26.000 45
19,000 4.50 4,01,700 15.45
Trade Fair ExpensesS 85,500 Depreciation - Computer 26,000
Advertisement * * * . 19,000 9.75 1,85,250 Office Salaries
12,12,900 26.000 65
Depreciation Delivery Van *
19,000 6.00 1,14,000 Total Administrative Overheads
7.91.700 26,000 30 45
130.00
Total Selling & Distribution Overheads.. . **
19,000
20.25 3,84,750 33.80,000 26,000
CoST OF PRODUCTION 390.00
L.TOTAL COST/COST OF SALES 19,000 110.00 20,90,000 H.
Finished Goods
1.01,40,000 26,000
M. PROFIT * ***
19,000 10.00 1,90,000 Add: Opening Stock 7,60,000 2.000
N. SALES 19,000 120.00 22,80,000 Less: Closing Stock
CoST OF GOODS SOLD
(11,70,000) (3,000) 390.00 389.20
Notes 97,30.000 25,000
1. Machinery, Dividend Paid, Machinery Purchases K. Selling& Distribution Overheads
Financial Items Loss on Sale of are to be Salesman Salaries 6,47,500 25,000 255.90
ignored. 42.75
2. Drawing and Designing Expenses are treated as Works Overheads as per CAS-4.
Showroom Expenses 10,68,750 25,000

lustration 17
Advertisements
1533,750 25,000 35
130.00
Total Selling & Distribution 32,50,000 25.000
Following details are furnished by NY Ltd. of Expenses incurred during the year ended 31st March, 519.20
2014.
TOTAL COST/ COST OF SALES 1.29,80,000 25,000
129.80
M. PROFIT (25% of Cost 32,45,000 25,000
Particulars N. SALES 1.62 25,000 25.000| 649.00
Salesman Salary
Opening Stock of Finished Goods
**** *** **

** 6,47,500
(2000 units) Note:
7,60,000
Director's Fees -Opening Stock
* * *** '**

Direct Material Units = Production Closing Stock

Indirect Wages 9,73,700
9,76,300
25,000+3,000-2,000 =26,000
Repairs to Office Funiture
*** **'*** **

Works Managers Salary ****** * **

4,01,700
Showroom Expenses 11,94,700
* ** **'

'* |10,68,750
 306

Wlustration 18
From the
Cost Accownting (T.N.B.Com.
year 2014,detaits given
giv
:
SM a n dP a

Wage

showing costbelow, Salary

Janagerg Sa
the first and
prepare a comparative
compr cost sheet for
econd h etsamo
Particulan per unit in
each case
se, at all stages on Computern

Hall year endeg n a s e o fM a d Machinery

on Delvery Van
Direct Materials Consumed 0-6-14 31-121
c i a t i o n on D e /

aintenance Charge
Wages 50,000| Mainte
Overheads
Chargeable Expenses
FactoryOverhe

60,000 off 1409

Depreciation of Factory
w i lw r i t t e n

10,000| 19.000 Units)

Indirect
Wages in FactoryMachines 16,000 2
.04900
Rent Factory 20,000 20000
30 000 ck of Finisned Goods to be
Office 6,000 Cosn
ea
uired to prepare Cost Sheet ralued
showingat Cont
Repairs ** **
8,000 4,000 find outt Total Profit and
Total
and tPer
o
reyurtien
Factory 6,000
8,000 yo
soltlon:
n da n
Unit Pre nous slemerts ot o eth n oftas nd
Office ***** ***

Sundry Office Expenses 9,000 4,000 , et. 14, SVSAF Mar 18 apted)
Output during *
**"
*
*** 6 000 2,000 Deapak Ltd.
the penod in Units 20,000
Units
20,25.(000 Cost Sheet For
the Year
Ended 31st
Solution:
31-12-2014
LEMENTOFCO
coST Production:20,.000 unitsMereh 2013
Cost Sheet For the Year Ended
Total PerUni
Half year ended
Half year ended Direct Material

30-6-14
31-12-14 Direct Wages
3.00000 5.0
STEP ELEMENT OF 20,000 Units 25,000 Units Direct Expenses 2.00.000
CosT PRIME C o S T
Total Per Unit Total
Per Unit Factory Overheads:
1.80000 3.2
Tons Depreciation on Plant and Machine
6.80.000 3300

Direct Material Consumed 50,000 2.50 70,000 Works Manager's Salary 96.000 4.80
****' *** ***

60,000 3.00 80,000 2.80 other Factory Overheads ,0.0 5.00

Wages ** **
3.20 2.04 QC0
c
Chargeable Expenses 10,000 0.50 12,000| 10.20
0.48
* * *** ** **

FWORKSCOST 400.C00 2
D. PRIME CoST 1,20,000| 6.00 1,62,000 6.48 office Administration Overheac 10.80.000
Factory Overheads 0.80 General Mangers Salary
16,000 20,000
Depreciation of Factory Machines.
20,000 1.00 30,000
0.80 Depreciation on Computers 3.80.000 19.06
Indirect Factory Wages * *

.25 4,000
1.20 Office Maintenance Charges 1.72.000 8.80
Factory Rent **" ***| 5,000 0.16 188.000 942
6,000 0.30 4,000 3700
Factory Repairs 0.16 cOST OF PRODUCTION 740.000 90.00
WORKS coST ** 1,67,000| 8.35| 2,20,000 8.80 A.
Add: Opening Stock of Finished Goods 18.00,000 86.25
Administration Expenses: (1,000 units)
85.250
Office Rent 8,000 0.40 8,000 0.32 Less Closing Stock of Finished Goods 90.00
Office Repairs ** *** *** ** ***
9,000 0.45 2,000 0.08 .
(2,000 units @ * 90 per unit) 1.80.000)
Sundry Office Expenses 16,000 0.80 20,000 0.80 cOST OF GOODS SOLD 17.05,250 89.7
K.
H. coST OF PRODUCTION * * * *
2,00,000 10.00 2,50,000 10.00 L.
Selling and Distribution Overheads

lustration 19
Demonstration Expense 5,500 4.50
Advertisement 1.85.250 9.7
Following details are furnished by Deepak Ltd. of expenses incurred during the year ended 31st Depreciation on Delivery Van 114.000 6.00
25
March, 2014. 3.84,750 110.00
TOTAL COSTI COST OF SALES 20,90,000
Particulars M.
1.90.000R 10.00
N. PROFIT
22.80,000 120.00
Direct Material
SALES/SELLING PRICE(19,.000
units)
* ** ** **
3,40,000 L.
Opening Stock of Finished Goods (1,000 units) 85,250
Closing Stock of Finished Goods (2,000 units) ** ********
Units sold out Opening Stock
Producton Closing Stock
Depreciation on Plant and Machinery 200 units
96,0 19,000 units 1,000units +
Loss on Sale of Machinery
17,500 Production 20,000 units
Demonstration Expenses 500
2015 from the books
of
Direct Expenses 1,60,000 llustration 20: extracted for the year
ended 31st March,
General Manager's Salary 3,80,000 particulars have been
ollowing Ltd.
M/s Ashwin Manufacturing Co.
 e of Serag
CsAcrounting (1. . B. Com.
Particulas
Purchase
EM oening Stork of
Closing Stock of ork in
Prograse
of Raw
Direct Wages Materials ACTORY /WORKs 0ST
n

Office Sataries a95 O00 Overheads 78.000

Camage Inwards 3,18 000 otmce

Salaries
2.73.009
Camage Outwards 94 O f l i c e

Lighting
(1/10th for Offece) 19 74.09
Sales O00
ana

Expense9

Opening Stock Raw Materials 2,80.10 Repairs (1/10th for

10,8000,000000
G u n d r y

* *

Manage
g e r ' s Salai Ofice) 25 500 7
Finished Goods (6.000 Units) orociation on Office Building. 10.566 7

Travelling ExpensesWork-in-FProgress
Interest on Capital
G6 000
OF PRODUCTIO
10 500
77
* * *** *
9.059
Advertising
oST
30 000 Opening Stock of
Power
**' *** ***

29 80 nighod Goods (6,000) 180.500

Income Tax 12.34 5600 23
Agent's Commission
* * ***

*
**'

***
**

10.5 500 : Closing Stock of

LoSSad Goods (7,000 units
FinishedGoodg
44910
Plant Maintenance ,190 8.23 per unit)
a
Rent and
Lighting (9/10th
*** ** **

500 COST OF
GOODS SOLD
Rent Received for Factory) ****** **" 05,000 carriage Outwards
* * 57.610)
Rent of Warehouse 3000 Travelling Expenses * ** *****

2,80,120
12 21.800 8.20
Sundry Expenses Factory * * *

960 . 1 88
13,500
500
Advertising

**** 11 920
Office
***'** * Agent's Commission ***
* **

29800 .08
Buiding Repairs (1/10th for Office) 1,0225,050000
Rent or Warehouse
46.190
0.20
031
Manager's Salary (tor Factory 12.000) coST OF SALES 960 O.04
Depreciation on Plant *** '* *** *
19,7 550000 ***
3.73.990 25
Factory Building * * ** * *
PROFIT

***
**. .
.. 15.95.790 10.71
Office Building 9,000
...

4210 .03
M . SALES

Sale of Scrap *** * **

R 78,000.
During the year 1
4,500 :tration21: 16.00.000 10.74
otock of Raw Materials 1,95,000 and Work-in-Progress t ronics Ltd.
units were produced out of which 7,000 un nct
iharat.
produces
ending 31st March 2016
a
standard product and
pOOUct
profit and
total profit
cost and total and per unit profit.
profit earna provides you the tolo
provides toilowing informaton tor
epare Cost Sheet and show the total and per unit (T.Y.B.Com., Oct. 2015, adapte
h ey e a

Solution Particulas

MANUFACTURING CO. LTD.

M/S ASHWIN R a w M a t e r i a l s

31st March 2015 Opening Stock

Cost Sheet For the Year Ended
1.00.000
Production:1,50,000units] Purchases

Closing Stock 8.45.000

Total Cost 40.000

STEP ELEMENT OF COST Per Unit Custom Duty
5.000
Direct Wages
Chargeable Expenses *** *** ** ** 2.00,000
* *
1,00.000
Direct Material Haulage Charges
* 10.000
Raw Materials Consumed: tools written off
20.000
Loose
Opening Stock of Raw Materials. 1,80,000 1.20 Works Manager's Salary
***** ** *** ***

4,95,000 3.30 *** *** ** *** 1.65.000

Add: Purchases Cost of Rectification
Carriage lInwards .. ..
3,000 0.02
**** *** *
5,000
10% of works overheads
Less Closing Stock of Raw Materials 1.95,000) (1.30)| office Overheads
Raw Materiais Consumed 4,83,000 Selling Expenses 4 per unitsold
3.22
Direct Wages ** *** * ** **
3,18.000 2.12 FinishedGoods:
C. PRIME COST ***** * *** ***. 8,01,000 5.34 Opening Stock 1,000 Units R 1.59,920)
D. Factory Overheads Produced during the year 10,000 Units
Power . . *** 10,500 0.07
Plant Maintenance 37,500 Closing Stock 2,000 Unitss
**** ***** **
0.25
Rent and Lighting (9/10th for Factory) 94 ,500 0.63 Profit desired on cost 25%
Sundry Expenses of cost both in total and per unit and also find out
,500 09 Prepare Cost Sheet showing the various elements (T.Y.B.Com., Nov. 2016, adapted)
Building Repairs (9/10th for Factory) 94,500 0.63 total profit and per unit profit.
Managers Salary 12,000 0.08
Depreciation on Plant ***
19,500 0..13
Depreciation on Factory Building .
7,500 0.05
 310
scanon1of
o r Costs and Cost Sheets

Solution Cost Accounting (T. YB.Com

:SEM- S e l l i n ge x p e n s e s are 15 per unt
o m p a n yc h a
pens for
profit at 20% on product Aand ? 20 per unt
a

BHARAT ELECTRONICS LTD. C O s t

owing the cost andsales tor both the produts for produt
sheet show
Cost Sheet For the Year Ended 31st March 2016
P e p a r e.
proft in total as wel
asin per
Production: 10,000 units and Sold 9,000 units] Solutlon unt
M/S VISHAL (SYBAF Oct 2016, adapted)
STEP ELEMENT MANUFACTUAING COMPANY
OF CoST Total Cost Cost Sheet For
Per Unit the Year Ended
A. Direct Material
31-3-2014
Raw Materials Consumed:
PRODUCT A
NT OF COST| Working Total PRODUCT
Opening Stock of Raw Materials 1,00,000 00 Cost
Units Unit Working Total Units Unit
Add: Purchases Cost Cost
* * *** 8,45,000 84.50 Cost
Custom Duty 5,000 0.50 No.
Less Closing Stock of 100x2,000 2,00,000 2,000
(40.000)|
A . D i r e c t M a t e r i a l s

Raw Materials (4.00)|

8.
Raw Materials Consumed 9,10,000 8, Direct wages 60x2,000 1,20,000 2,000 100.0o12015.00o6.00.000
60.0o 50x5.00o 250.000 5000 c0
40X2,000B0.000 2,00040.00
* ****

Direct Wages 91.00 C D i r e c t E x p e n s e s

5.00
4,00,000 2,000 200.00 B05.000400.000
2,00,000
C.
Chargeable Expenses
*** *** *** *'" **

20.00 OST
5.000
1.00.000
D PRIME

12.50.000 5.000 250.00

D. PRIME CoST
* * * *

12,10,000| 10.00
E Factory Overheads

Cost)
80.000 2,000 40.00 2.50.000 5.00052200
E Factory Overheads 121.00 (20% of
Prime

Haulage Charges 10,000

E WORKS COST
4,80,000 2,000 240.00 15.00.000 5.000 300.00
**** * *** 1.00 G Office Overheads

1,20.000 2,000 60.00

Loose Tools written off 20,000 Cost) 375.000 5.00075.00
2.00 of Works
Works Manager's Salary * * *** **
1,65,000 16.50
(25%
H.COSTOF
Cost of Rectification 6,00,000
****** *** *** ***.

5,000 0.50 DUCTION

Less: Closing Stock

300.00 18.75.000 375.00
** ***
2.00.000 20.00
F.
G.
FACTORY /WORKS COST * *
Office Overheads (10% of Factory OH)
** *** '**

14,10,000 141.00
ot Finished Goods

coST OF GOODS
300x5001.50.000 500 375 x500187 500 s00
H. COST OF PRODUCTION
20.000 2.00 4,50,000 1,500 300.00 16.87.500 4.500 375.00
Add Opening
* * * ***
14,30,000| 143.00
SOLD
elling O v e r h e a d s
15x1,500 22.500 1,500 15.00 20 x4,50090.0004.5002000
Stock of SALES 4,72,500 315.00 17,77,500 395.00
Finished Goods (1,000 units) ****
1,59,920 K. COST OF
Less Closing Stock of L.PROFIT

Sales =

Finished Goods (2,000 units (20% on

25% on Cost) 1.18.125 1,500 78.75 444375 4.50087
7143 per unit) (2.86.000) (143.00) M. SALES 5,90,625 1,500 393.75 22.21,875 4.500 493.75
COST OF GOODS SoLD
Add : Selling Overheads
***** *** **' ***

13,03,920 144.88
lustration 23: (Using Equations for Cost Allocation)
R 4 per unit sold) manufactures two types of pens 'Sharada" and "Viveka. The particulars
M. COST OF SALES
****** ** ***

36.000 4.00 M/s. Vidya Pen Company

follows
N. PROFIT (25% on Cost)
** *** **' **"'**

13,39,920 148.88 forthe year ended 31st March,

2014 were as

O. SALES
.
3,34.980 37.22
* * *** **
16,74,900| 186.10 ParticularsS ******* **
5,00,000
Direct Material 2,25,000
3.3 TWO PRODUCTSs Direct Wages
**** ******
75,000
llustration 22: Direct Expenses 10,00,000
(Working
back sales)
Total SalesS
M/s.Vishal Manufacturing Company manufactures two the end of the year. On
the study it is ascertained
for the year ended
types of products iz. A and B. The information at the beginningorat
on 31st March, 2014 is as under. here was no work-in-progress
that "Viveka Pen".
much as that in type
Particulars consists twice as
Direct Material unit in "Sharada Pen' "Sharada Pen"
Products (1) per
Pen' were 40% of
those for
unit for "Viveka
A 2) The Direct Wages per well as Sharada Pen.
same per unit for Viveka as
) Direct Expenses were cost.
Direct material per unit 20% of the prime
(4) Factory Overheads were
Direct labour per unit *** * 100 120 Overheads were
50% of Direct Wages. 5,000 units of Viveka
2,000 were sold and
Direct expenses per unit * ** **' 50
60 50
Administrative
Pen were produced ofwhich
** *** *
40 80 2,500 units of Sharada which 4,000 were sold, during the year. unit for Viveka Pen.
produced of Pen and * 9 per
Additional information: ren were
Overheads were 8 per
unitfor Sharada
Viveka Pen
w a s 1 2 5 respectively.

(1) Factory expenses are Selling was 250 and per unit for
charged at 20% of price per unit for
Sharada Pen in total as well as

(2) Office expenses are charged at 25% of prime and protit

cost. (8) elling
S
statement showing cost,
works cost. required to
prepare a
(3) 2,000 units of product A were Uare
produced of which Sharada Pen and Viveka Pen.
B were
produced of which 4,500 units were sold.1,500 units were sold and 5,000 units of produc
 312

Solution ost Accounting (1. V.B.C. ote and

M/s. VIDYA PEN CO.
Y.B.Com. 1SEM ighling
mt Sheet

Cost Sheet For the Year Ended 31st March 2014 ost
of
ctoy
recn
ing de wok

ELEMENT OF COST Sharda Pen Viveka Pen Matenials,

t h e c o s t

sheet for
ot for
sheet lor tthe
Aepaim art Aser
the nertatrrre y4at,
thenqthot te hortirer
t o dc o s

yeat
Produced: 2500 units
Produced: 5000 unite 1s Cost and direct

overheads will bewages a0urirg

Sold 2000 units Sold: 4000 Units ctoy,
amerte 200.00
sellingrecovereMa
arheads and s
TotalCostUnits Unit Cost Total
i c e o v e r h e a d s ,

Cost Units
A. Direct No. No. Unit Co yoar
a n d

ets will be
be
ovemea erartace n 15P noerto

B. Direct Material (Note 1)

Wages (Note 2)
C. Direct Expenses
2,50,000 2.500 100 2,50,000|
50 1,00,000 5,000
( )1

5oulo7
5 0 0T v ,

produced and soid at?

2,500
5,000 .B.Com,,66Apri 9ch n te ret e
1.25,000
D. PRIME COST 25.000 500 10 50.000
E. Factory Overheads 2,500 160 4,00,000 5.000 Cost Sheet
For the 202. 2002. SYBAF,
4,00,000
32 80.000 5,000 i
Oct. 08. Feb
F. WORKS COST 80.000 2.500
,500 192 4,80,000 5.000 Units Produeced Year
Ended
09. sdagted
G.Administrative Overheads 4,80.000
2.500 25 50.000 5,000 STEPELEMEA EMENT OF COST 1
Sold:150
H. CoST OF PRODUCTION 62500
5,42.500 2,500 217 5,30,000 5.000
5,000
Less : Closing Stock of Direct Materials
Note
Finished Goods 1.06.000 Total Cosr Per Unt
1.08.500 500 1.000 Direct Wages
No
cOST OF GOODS SOLD 2,000 217 4,24,000| PRIME oST .A+ B
4,34,000
8 36.000 4,000 18 00.000
Selling Overheads 16.000 2.000 .000 Works Overheads ** ***** *

1800 00
J. TOTAL coST
4,50,000 2,000 225 4,60,000| 4,000 WORKS OST [C+ [ 10.00.000 1.000.00
K. PROFIT
50.000 2.000 2540,000 4.000 Office a n d .
inistration Expenses ** 28.00.000 2.800.00
250 5,00,000 880.000
L. SALES 5,00,000 2,000
4,000 -0 G. collin
ST OF DUCTION TE +F)
Distribution Expenses
36.80.000 3680.00
Notes 125 COST OF SALES 6.80.0068000
43.60.000 4.360.00
(1) Calculation of Direct Material Profit [K .

120.000120.00
be 2m. J.
Let the cost of matenal per unit in Sharada K. SALES 4480.000 4,480.00
Let the cost of material per unit in Viveka
be m. 1720.000 1720.00
m (5,000) + 2m (2,500) = 5,00,000
Estimated Cost Sheet 62,00.000 &.200.00
For the Year
10.000 m = 5,00.0000 Units Produced Sold:1,500Ended
OF OST
m 50 GTEP
ELEMENT

Viveka T 50 per unit Not Total cost Per Unit

Sharada =7 100 per unit (2 x 50) Direct Materials No.
(2) Calculation of Direct Wages Direct Wages *** *
29.70.000 1.980.00
'Sharada' be w. PRIME COST [A + B] 1725.0001150.00
Let direct wages per unit in
**** * *
0.4w C.
Viveka' = 40% of F 46.95,000 3,130.00
w =

Direct per
wages unit in
.
Factory/ Works Overheads ** *** ***
***|

wORKS CoST [C+ D] ** ***** *** ***

15.18.0001.012.00
w (2,500)+0.4 w (5,000) =2,25,000 E Office Overheads
***** 62.13,000 4,142.00
2500 w+ 2000 w =2,25,000 cOST OF PRODUCTION[E+ F1
*** *** *** 1148.054 765.37
4500 w= 2.25,000 Selling Overheads
*** *** *** *** 73,61,054 4.90737
H s * *** *** 2.02.598135.06
W= 50 cOST OF SALES (G+ H] *** *** *** *" *
75,63,652 5,042.43
in Sharada 7 50 per unit Profit 23.36.3481.557.57
Wages =

of 7 50) J. **** *****

7 20 per unit (40%

K. SALES IK-I
99.00,000| 6,600.00
Wages in Viveka = * * ** ** ***

of production remain the same.

unit
(3) Direct expenses per both pens.
Working Notes
unit for
7 75,000 7,500 units 7 10 per =
(1) Works Overheads
2,40,000
Power and Stores
3.4 ESTIMATED COST SHEET Indirect Wages
3,00,000
1,20,000
llustration 24: (Rectification of
Defective Work) Factory Lighting 2,00,000
information about its 1000 TV
Super Vision Company furnishes you with the following
sets
Repairs and Depreciation of Machinery 60.000
Rectitying Delective Work 9,20.000
manufactured and sold during the year Cost of
40.000

Particulars Particulars Less Sale of Scrap 8.80.000

18,00,000 Office and Administration Expenses 6,80,000

Materials 1,20,000
10,00,000 Selling & Distribution Expenses
Direct Wages 40,000
Power and Stores
2,40,000 Sale of Scrap
314
(2) Direct Materials
sicaHon,of Costs
ion
and
Cost
Sheets
Cost Accounting (T. Y.B.Com, sales/ Distribution Ovemeade
Cost per unit
Cost per unit will rise by
:
SEM. ng rheads (WN 5)
A d d

n Overheads (WN 315

10% 6)
previous year
Rise by 10% oisT
ST OF.SALES
Profit (1/5th on Costo
Increased Cost
(3) Direct Wages ,800
A d d .

Sales) 5,976
2.998 B.964
S A L E S

Cost per unit 180

980
he
duct should be: Sold for
61,354 to eam i
'
***
**'
**"| 51,128
1 a e . 1/6th on sales. 10.226
Cost per unit will rise by 15%
**

the same 61.354

Rise by 15% previous year " arate
workingNotes
e of
of profit on
profit on the selling price as in the
u

Increased Cost ,000 Cost Sheet

(4) Works Overheads 150 (1 ELEMENTOF COST
For the
Taken as a 1150 Year 2013
percentage of Direct Wages rect Materials
TEP

Nages
OT Work overheads previous yearyTotal cost of Direct Wages current year
Total cost of
RIME CO
*** *
Direct Wages
previous year CAdd: Factory overheads ***** *.
12,00,000
8,80,000 COST 10.00.000
22.00,000
10,00,000 17,25,000
(5) Office Overheads
x =
15,18,000 WOAdministrative Overheads
oST OF PRODUCTIONOS
***

***
****** **".*

** * ***
6.00.000
Taken cOSales / Distribution Overheads *** *** **
28,00,000
as a
percentage of Works Cost selling Overheads * ** * **
6.72.000
34,72.0000
otal cost of office overheads previous year Total Works Cost current year istribution erheads
ST OF SALES
Total Works Cost
previous year
******** *** **
*** *** *** *.
4,48,000
Add: Profit 2.80.0007.28.000
6,80,000 x 62,13,000 11,48,054
** *** *** ***
42,00,000p
36,80,0000 K . S A L E S
*** *** *** * **

8,40.000
o f Per
(6) Selling Overheads Calculation
rcentage of Profit ****** *** **
50,40,000
Taken as a percentage of Works Cost 2) C o s t o f S a l e s
1,20,000 Profit 42,00,000
x 62,13,000 2,02,598 8,40,000
36,80,000 Sales

50,40,000
llustration 25 (Changes in OH Rates) 8,40,000
Profit asa percentage of sales
nrespect of a factory the following figures have been obtained for the year 2013 50,40,000 I16.67% or 1/6th on sales or 1/5 on cost of

Cost of Materials 12,00,000

5aation of Factory Overheads (Based
8 )C a l on % to Direct
Wages)
Factory Overheads 6,00,000 Rate of Overheads in the year 2013 6,00,000 x 100
Selling Overheads 4,48,000 60%
Rate of Overheads for the year 2014
10,00,000
Distribution Overheads 2,80,000
10,00,000
=
60%+20% of60%
Direct Wages 72% on direct wages
Administrative Overheads 6,72,000 . Factory Overheads
72% xR 10,000 = 7,200
Profit 8,40,000 aCalculation of Administrative Overheads (Based on % to Factory Cost)
A work order has been executed in 2014 and the following expenses have been incurred:
Materials 16,000 and Wages 10,000. Date of 6,72,000x
Overheads as a proporion to actory Cost 28,00,000 100 24%
Assuming that in 2014 the rate of factory overheads has increased by 20o, distribution overheads
have gone down by 10% and selling and administrative overheads have each gone up by 12%%, at Administrative Overheads for the year 2014
33,200 x 24% = 7 7,968
what price should the product be sold as to eam the same rate of proft on the selling price as in 24% on Factory Cost
2013? Factory overheads are based on direct wages while all other overheads are based on factory Administrative Overheadsfor 2014 = 7,968+ 12.5% of 7,968
cost. (T.Y.B.Com., Oct. 2002, adapted) = 8,964

Solution: Calculation of Selling Overheads (Based on % to Factory Cost)

Cost Sheet For the Work Order Executed in 2014 6)
Rate of Overheads as a proportion to Factory COst
74,48,000x 100
= 28,00,000
16%
STEP ELEMENT OFCOST
A. Direct Materials ** 16,000 Selling Overheads for the year 2014 = 33,200x 16% = 75,312
B. Direct Wages 10,000 26.000 @ 16% on Factory Cost = 5,312+ 12.5% of R 5,312
C. PRIME CoST 26,000
for 2014
****** * **

D. Add: Factory Overheads (WN 3) 7.200 Seling Overheads 5,976

WORKS cOST 33,200

E
Add: Administrative Overheads (WN 4) ********* ** * 8,964
G. COST OF PRODUCTION ** *** *** **" '**
42,164
316
(6)
Calculation of CostAcceunting (T. V.B.Co ion of Costs and Cou
Com. :SEM. Sheen
Rate of Distribution Overheads
oution
(Based on of Factory Cost) fice& Administratie
larnes
Ezpenss
Overheads as
o l i c e S a l a n

2,80.000
Distribution Overheads torproportion to
a
a Cost 28.00.000 100 10% office Hent

Depreciation
10% on the year 2014
Distribution Factory Cost
Overmeads for 2014
33.200 x 10% =R 3,320
3,320 10% of R
OF
COSTOF
gles Expenses
PRODUCTION 12
3,320
lustration 26 : 2.988 cos
OF SALESS 2573755SEA 5.000
2.112.5
The P R O F I T

10.33
Trading
Profit and Loss Account
was as foliows
K S A L E S

9500 87 2833
ofVijaya Manutacturing company for the year
ear endino
ending 31-12-20 87 280 5.0o0
2.0 o
Dr.
rading Profit and Loss Account For the Year ended 31-12-2013 2-2013 votes

i s to
be produced i nduced in 2014 will 250000 1000o39
122 79.000 33
2333
of Raw Ma
1se by 20% 11556
Particulars
ToRaw
Particulars direct wages will ie. 250+
0..
To DirectMaternal
Wages Purchased 80,000 By Sales (2500 units)) ) P e r

unit
cost of tactory
i 5
y 25% ie. 1
214 30 10% of 30- 33
500=3000
To Direct Expenses
To Factony Expenses
30,000

25,000
By Closing Stock of Raw Material
2,50.5,000000 ) S a

es which was
l a r the same in w h i b e

oy 25%
the 1e

To Gross
Profit cld
40.000
80,000
premises

The rent will not appearenta

61ice
emisenot
on
rental 2014 as in
appear in 2014. basis in 201 2013
in 2014 Le. 7 16 14 7 16-7 20
inary expenses written of Instead
ad deprecate
2.55,000 7 l not be shown in the depreciaton dt ? be purchased 2014 and n
To Office Salaries
To Office Rent
25,000 By Gross Profit b/d
2,5805,000000 ceived and discountcost sheet hen df are6.000 woud
wo be rarged. nence
tnancal expenses
To Selling Expenses 12.000 By Dividend Received t h e cost sheet.
received aE
are
s / osses and

12.500 By Discount Received 10,000 is a bal financial incomes and

hrancial
Profit year 2013
for
To Preliminary Expenses Written-off 2,500 100 (S. P). Profit hen wil nat be
nence
7500
al
is shown
To Goodwill Written-off 5,500
(profit):

gJustration 2 7 :
1/4 or 20P% near 2014 profit is
To Net Profit c/d 20 on
salesLe 80
40,000 (cost)-20
97,500 Trading and Profit
For the year 2014, it is estimated that -
97 500 For the and Loss
Year Ended Accouts of
(1) Units produced and sold will rise by 20%.
31st March MK & Co
Particulars 2013
(2) Prices of Raw Material per unit will rise by 10%.
3,75,000 Particulars
Matenals Consumed

(3) Direct Wages per unit will increase by 25%. To Direct Wages
By
(4) Direct Expenses will increase by 5,000 in total. To Factory Overheads
2.25,000 Sales (15.000 units) 15.00.000
(5) Factory Expenses per unit will increase by 25%. To
Gross
Profit c/d
3.00,000
(6) The Office premises which was on rentalbasis in 2013 would be purchased by the com 6,00,000
which depreciation would be 6,000 in 2014. To Office Rent 15,00,000
(7) Seling Expenses per unit will remain same. To General Expensess 90,000 By Gross Profit bd 5.00.000
You are required to prepare a statement showing estimated cost and profit for the vea To Management Expenses 75,000 By Dividend Received 6.00,000
31-12-2014 considering that company shall charge a profit at 20% on sales. ended To Goodwill w/off 60,000 By Interest on
Investment
13.500
Solution 22,500 6.500
(T.Y.B.Com., March 03, adapted) To Advertisement

To Salesmen Commission 1,312

VIJAYA MANUFACTURING
To Interest on Loan 1,50,000|
Cost Sheet Showing Present and Estimated Cost To Net Profit c/d 14,500
76,750
2013 2014 6,20.000
STEP ELEMENT OF COST WN Forthe year ending 31st March, 2014 following estimates have 6.20.000
2500Units 3000 Units
1 a) Production and sales units will be doubled. been made
:
Total Cost Unit Cost Total Cost Unit Cost ) Direct material cost per unit wil rise by 20%

Direct Material c) Direct wages per unit will increase by 40%

75,000 30.00 99,000 (d) Of the factory overheads, ? 1,50,000 are Fixed and would remain
Direct Wages 33.00 2 at the same level but variable
Direct Expenses
*** ** *** *** **"

30,000 12.0 45,000 15.00 3 thereof would be in same proportion to direct wages as in 2012-13.
PRIME COS 25.000 10.00 30.000| 10.0 e) Total office and administrative overheads would increase by 40%.
E. Factory Expenses
* * * **
1,30,000 52.00 1,74,000 58.00 () Selling and Distribution overheads per unit will increase by 20%.
F FACTORY COST
* ** *** **
40.000 16.00| 60.000 20.00 4 g) Selling price per unit would ise by 10%.
1,70,000 68.00 2,34,000 78.00 You are require to prepare
Cost Sheetcost
0) Projected for the year ended 31st March, 2013 showing cost per unit and total cost and
sheet for the year ending 31st March, 2014 showing cost per unit and total cost.
 318
of Cote and Cou Sheen
ion
Solution : CostAccounting (7. .B.Com
compan orked to a
2011, EM
Work

(T.YB.Com., Oct. @040 produGlimari

to increas0 produs
mum eagCMy
on caparty
CoST SHEET edaptea There
unind ise in all
ill be allround riso
Will
to
15.00 19,oo0 vite uirg 914 The manapmernt
nite fer tehurirg
STEP ll be increase of 20% varlables "r ar ear 15 d sstimatn
9 anda
ELEMENT OF COST 31-3-2013
Units:15,000
31-3-2014
Units: 30,000
m o r ow i l l

will b e no
nged to change
he
ergerimre
hearY ty 10,
1P
paroa

statoment showingtoehesselling
stato

Rate
Rate
stimated proliprofitt for 2015 takin orea for the ysar
Direct Materials
Per Unit
Per Unit ing takinig into st and preft for2015
B. Direct Wages 3,75,000 25.00 9,00,000| sotution consideraion the changes
2014 Aie
gr9gare ta a

C. PRIME COST
D.
2,25,000
6.00,000
15.00 630,000
40.00 |15,30,000
30.00
21.00
MWs.KT MANUFACTURING Oct
Cost Sheet
(T.Y.B.Com.
CoMPANY 2015
2003, SVBAF, Oct 2015.
adagted)
Add: Factory Overheads
5100 For the Year
Fixed 1,50,000 10.00 1,50.000 Ended 31st March
Variable
Total Works Overheads
****
***** ***

**"
**' **".

**
1,50,000 10.00 4,20,000 5.00
14.00 EL EMENT OF COST 2014
2014&201
3,00,000 20.00 5,70,000 STEP

2015 WN
WORKS CoST
** ** **

60.00 |21,00,000 19.00 10.000 Units

Add: Office/Ad
* * *
9,00,000
70.00 otal Cos Unit Cost Total15.000 Unit
Office Rent ministrative Overheads 90,000
i r e c t Material
* * * ..250.000
Cost Unit Cos
Direct Wages
General Expenses 75,000 PRIME COST
**** *********
25.00 4.12 500 2750
Management Expenses 60,000
C Factory Overheads
****** ** ***
150.000 15.00247 500 1650
Total Administrative Overheads. .***' ** 2,25,000 15.00 3,15,000 4,00.000 40.00 6.60.0o0 4400
G. 75.00 24,15,000 10.50 Fixed
***
*****
*** ***

H.
coST OF PRODUCTIOON
Selling & Distribution Overheads
*** *** *** *** 11,25,000
80.50
Variable

FACTORY COST * * *** **

10.00 120.0o0
2.00.000 20.003.30.000 8.00 1,00.000
8.75 3,15,000 Administrative Overhead 22.00
Advertisement * * * ***.
1,31,250
10.00 3,60,000 10.50 7,00,000 70.00 11.10.00o 7400
Salesmen Commission *** *** ** **
**
1,50,000
12.00
COST OF PRODUCTION
Selling Oveheads
1,00.000 10.00120.000
Total Selling & Distribution Overheads 2,81,250 18.75 6,75,000
22.50 - Fixed
8,00,000 80.00 12.30.000 8200
TOTAL COST/COST 14,06,250 93.75 |30,90,000 * * *** **
J. PROFIT
OF SALES. 93,750 6.25 2,10,000 103.00 Variable
60,000
***

6.00 72.0
***
***

cOST OF SALES 90.000

***

7.00
***
**

** **
9.00 148500
****"
*** *** *..

K. SALES ** **
** 15,00,000 100.0033,00,000 110.00 PROFIT

.
9,50,000
250.000 95.00 14.50,500
Notes
K. SALES
25003.49.500
23.30
1. Material Per Unit:25+20% Working Notes :(Changes in 2015)
2.00,000 120.00 18.00.000 120.00
7 30 perunit
=

2. Wages Per Unit: 15 + 40% =721 perunit

ASSU
tion :
Increase in 'a vanable "expenditure" means increase in even direct
3. Factory Overheads: r Cost in addition to
'overheads'; as expenditure' covers marera a
Fixed Remain same i.e. 1,50,000 dreatively, it may De assumeo hat
only both costs and 'overheads
Factory Vañable Expenses and Sales
Variable: in proportion to direct wages (21 x 10/15) = F 14 per unit ease by 10% Variable Expense
4. Total Administrative Overheads : 2,25,000 40% = 3,15,000 incredal Unit
Unit CCost
Material 25.00 +2.50 =R27.50;
=

5. Selling Overheads: Advertisement = 8.75 + 20% = 10.50 per unit (1)

Nages Unit Cost 15.00+ 1.50= 16.50;
Increase 10% of 25 2.5
Salesmen Commission = 10 + 20% = R 12 per unit Increase
octory Overheads (Fixed) =1,00,000 20,000
10% =
of 15 1.50
=

1.20,000; Increase 20 of 1,00,000

6. Selling Price 100+ 10% = 7 110 per unit 20,000

lustration 28: (Fixed and Variable OH) A Eactory Overheads (Variable) = Unit Cost = 20+2.00 22
Unit Cost = 2,00,000 + 10,000 20
KT manufacturing company gives you the following particulars for the year 2014. Production and
sales during the year was 10,000 units. Increase = 10% of 20 =2
5) Administration Overheads (Fixed) = 1,00,000 20.000 = 1.20.000
Particulars Increase = 20% of 1,00,000 = 20,000
Materials ***
2,50,000 (6)Selling Overheads ed) = 60,000+12,000= 72.000
Direct Wages ***** *** ***
1,50,000 Increase = 20% of 60,000 12,000
Administrative overhead (fixed) ****** ** *"
1,00,000 9.90
Sales (7) Selling Overheads (Variable) =9 0.90
Profit
12,00,000 Unit Cost =90,000+10,000 = 9
2,50,000
Factory Overheads : Increase = 10% of 9 = 0.90
Fixed *** ** * ** ** 1,00,000 lustration 29: (Working Back Sale Price)
Variable 2,00,000 the year ended 31st March, 2014
**** * * * **
Following information is available from cost records for
Selling and Distribution Overheads 36 Per Unit
Fixed 60,000 Direct Material
28 Per Unit
****' *** *** *

Variable Direct Labour

** ******
*** ***

90,000 11 Per Unit

Chargeable Expenses
 320
ation of
nioanlon
Costs
and
Cow Sheets
Factory Overheads Cost Acceunting (1. Y.B.Com,
Fixed 15.00.000. EM ing overheads in 2015
Ofice Overheads
Seling Overheads
Vanable 10 Per Unit )Variablo
a l ei n2 0 1 5
Selling
Overheads in 2015:25
:5.0 000
75%120%-s00
Fixed 12.50.000 j n i ts o l d i n 2015 18 75 00
Units
Fixed 5,00.000 es
p o m e s t i cS a l e in 2015 50000 x160%
Produced Vaniable 25 Per Unit 80,000 x75%
Seling Price Perand Sold 50.000
in 2015

estic unit80000x 25 0 000

Expots

FoBowing Unit 210 price

per Don

() changes are anticipated

Production during the year ended 31st March, 2015.
sale Cost
2) and
Direct Material Sales will increase by yea Price

80
cost per 60
unt will increase
00
157
3 Direct Labour per by 2.5% ?
unit will
decrease by 5 157 x 100 = 196.25
nargeable
(5) Vanable expenses per unit will decrease oy
6) factory ove
verheads per unit will increase 25% Price Per Export Unit:
Variable
(7) All fixed seling overheads will decrease oy
sale

25%. Cost

(8) 75% of theoverheads will increase by Price

50
output 207
will be sold in Domestic Market at a profit of 20% on sales.
100 157
ce 25% output wl be sold in ?
You are
ExDort Market at a proft of 50o On sales. 15/ x 100 = 314
(1) e n required to
a Cost sheet for the year ended 31st March, 2014 and estimated cost sheetfor the
ended 31st March,
50ic Sale= 60,000 x
Domestic Sale =
2015, showing total and per
u year Exports
196.25 20,000 x 314 1,17,75.000
total and per unit
ate profit for
the year ended 31st March, 2014.
total saies and profit for Domestic Market and Export Market.
62.80.000
uiate Total

1,80.55.000
Solution (T.Y.B.Com., Oct. 2005,
adaot ustration 30 (Fixed and Variable OH)
Cost Sheet Management of a
manufachr
ene Man
The corncem t
000 units. The cost analvsis of
of 6,000
2014 2015 the pproached the Costing Department to
analysis of 4.000 units find out
STEP ELEMENT OF CoST WN als90,000, Labour 50,000, Direct Expensesgives1.000.following resus
Matentration
the
50,000 Units 80,000 Units Overheads 1,600 and Factony Overheads 2.000.
Total Cost Unit Cost Total Costt Unit Cost Ad her details in this connection areSelling and Distribution Overheads 800
increase of 10% is expected in the costfollows:
as

(a) ar of raw matenaland 5% in the cost of labour

A. Direct Material the factory overheads are fixed and
f
18,00,000 36.00 32,40,000 40.50 30% are variable.
B. Direct Labour ******** *** ***
14,00,000 28.00121,28,000| 2660 The ratio of fixed and variable part of
Administration
C. overmeads is 60: 40.
Chargeable Expenses 5,50,000 11.00 7,92,000 (d) 50% ofthe Selling and Distribution overheads are faxed.
9. PRIME CoST 37,50,00o
9.90 he Management desires to charge 25% profit on sale price.
F 75.00161,60,000 77.00
Factory Overheads Dreoare cost statement with maximum break up of cost and ascertain selting price tor the
Fixed 15,00,000o 30.00 18,00,000 22.50 4 of 6000 units. production
Variable (T.Y.B.Com., Mar. 07, adapted)
F
**** *****

5,00,000 10,00 10,00,000 12.50 5 Solution :

wORKS CoST
Office Overheads
**** *** **

57,50,000 115.00 89,60,000 112.00 Cost Statement

- Fixed
* *** ****

12,50,000 25.00 15,00,000 18.75 4,000 Units 6,000 Units

G. coST OF PRODUCTION **

70,00,000 140.001,04,60,000 130.75 ELEMENT OF COST

H. Selling Overheads Total CostUnit Cost Working Unit Cost Total Cost
Fixed 5,00,000
- Variable
*** *** *** ***
*
10.00 6,00,000 7.50
coST OF SALES
* * * *** **

12,50,000 25.00 15,00,000 18.75 A. Direct Materials

90,000| 22.50 22.50+ 10% 24.75 1,48,500
*** ** **
87,50,000 175.0011,25,60,000 157.00 B. Direct Wages 50,000 12.50 12.50 5% 13.13 78,7
J. PROFIT
C. Direct Expenses 1,000 0.25 Same 0.25 1,500
K. SALES
17,50,000 35.00 54,95,000 38.13 2,28,780
1,05,00,000 D. PRIME COST 1,41,000 35.25
210.001,80,55,000 E. Factory Overheads 2,000 0.50
Working Notes: - Fixed 2,000 x 70% 0.23 1,400
(1) Direct Material Cost Per Unit 2015: 36 x 0.50 x 30 0.15 900
in
(2) Direct Labour Cost Per Unit in 2015: 28 x
112.5% 40.50 =
Variable
38.51 2,31,080
95% 26.60 = F. WORKS coST 1,43,000 35.75
(3) Chargeable Expenses Per Unit in G. Admin. Overheads 1,600 0.40
15 11x 90% = 9.90 1,600 x 60% 0.16 60
(4) Fixed Factory Overheads in 2015 - Fixed

(5) Variable Factory Overheads in 15,00,000 x 120% 18,00,000 =

- Variable 0.40x40% 0.16 960
2015 10 x 125% 12.50 =
(6) Fixed Office Overheads in 2015:
120%12,50,000 x =
15,00,00o
Dod ule
.Costs and Cosu
Shee
322
Cost Accounting y.B38.83
(7. .RCo
.Com.:2,33.00
SEM Admini
O S T OF PROD
istrative Overheads
ODUCTION
15 15
313

H. Sales/Distr. 63.000
verheads

coST OF
. PRODUCTION
Overheads 1,44,600 36.1
0.20 0.07
5
OF SALES
10 32 000 51 60
- Fixed
800 800 x 50%
PAOFIT
S

120.000
0 . 2 0x 50%
0.10 A00 11 52.000 57
Variable 39.00 34 000
SALES
104
J. coST 2.08.000
OF
K. PROFIT SALES 1,45,400
36.35 1/3 o n C o s t
13.00 78,78000
0 k i n gN o t e s
13.6000
L. SALES 52.00 3.12.000 workins
Production& Sales (Units)
2014 2015
Add: 1/S increase

llustration 31 infomation
tor t h e y e a r ended 31st Marh
ended:
Matenal
Unit Co.
15.000
5000 20.000
Swadeshi Electronics Ltd. fumishes to you the following
rch, 25%
reduction in price 22 00
2014 15,000 units Less
550
Production and Sales 12,75,000
7 2,70,00o 0% increase
in
consumption 16.50
Sales 20

AoWages Unit Cost

Add:.

19.80
Direct Wages 3,30,000 D 2 0 % reduction
330
7 2,25,00o 18.0
Direct Materials Les overheads
Factory v e r h e a d s
14 40
1,05,00o 3.60
Factory Overheads T 90,000
Administrative Overheads Fixed
(Per Unit ? 12 x Units)
45.000 45.000
Sales Overheads estimated in the subsequent year Variable
180.000 240.000
On account of intense competition following cnan third. 2.25.000 2.85.000
Total
ne trative Cost
consumption hu
)Production and sales activity will be increaseo o will be
increase in

be lower by 25%.
there
However due : 4
% reduction 1,05,000

qualit ill
to quality difference automation.
L e s s .

S a l e O v e r h oads Per
e a
Unit (R 6) is same
for both the 42.000 63.000
due to years.
reduced by 20% Ihe remaining facton. actory expenses
cost would be offixed nature. Sale Price 85
(4) O ges overheads,
745,000 are Less: 20% reduction
7
above factory of units produrd 17
ae
vanable in proportion to
overheads
the number
will be lower by 40 ustration 32:(Working back Sales and Selling OH)
stic ADDliances
() Total administrative

( ) Sales overheads per unit

would remain
the same. manutactures Pressure Cookers. For the year ending 31st March, 2013.
expenses curre are as follows for an output of
() Sale price per unit would be lower by 20%.
March, 2014 and 31st Marrh 2,000 units.
ending 31st
the years
of cost for both
repare a statement details of cost.
P a r t i c u l a r s

showing maximum possible materials consumed

2.00.000
Solution sWADESHI ELECTRONICS LIMITED Raw
Direct w a g e s
****** *** ** ***|
1,00.000
15,000 Units]
F a c t o r y o v e r h e a d s

1,60,000
31-3-2014 [Output:
-

Year Ended
nistrative overhea 46.000
Cost Sheet For the Adm
selling overheads (10% of sales value)
Total Cost| Unit 70,200
STEP ELEMENT OF COST
Cost Distribution o v e r h e a d s
* *** *

36.000
***** ***

3,30,000 the year,

200 units were unsold.
22.00 During
A. Direct Materials 2.70.000Q 18.00 Carthe year Toliowing changes were estimated
2014, n e
6,00,000 price would rise by 10% but consumption per unit would decrease by 5o.
C.
Direct Wages
PRIME CoST
****
* * *
***
* * *

2.25.000
40.00 Raw materials
** *** *** ** *
15.00 would rise
(b) Direct wages ovemeads by60,000 are fixed and would remain at the same level but the variable
3.5%.
Factory Overheads * * **" **
8,25,000 55.00
E. WORKS COST Of the factory
* *

1.05.000 7.00 C)
thereof would be in same proportion to Direct wages as in 2013.
***

** **
Administrative Overheads
9,30,000 62.00
G COST OF PRODUCTION Administrative overheads would rise by 20%.
90.000 6.00 d) same level and distribution
H. Sales Overheads
10,20,000 68.0 overheads as a percentage of sales value would remain at the
e Selling
*** *** ** *** **

I. COST OF SALES would remain same per unit as in 2 3

J. PROFIT
. ** 2.55.000 17.00 overheads
** *** *** 12,75,000 85.00 ( output and sales would be 3,000 pressure cookers.
The
K. SALES
in the year 2014 is 40% of sales.
(g) Expected profit
Estimated Cost Sheet For the Year Ended 31-3-2015 [Output 20,000 Units] From the above
information prepare
unit and total
cost sheet of the year 2014 showing per
Total Cost Unit Cost Cost-sheet of the year 2013 and projected
STEP ELEMENT OF COST (1)
cost.
(Note) notes for the projected cost sheet.
A. Direct Materials 3,96,000 19.80 (2) Working (T.Y.B.Com., April 2001, adapted)
(3) Projected sales price.
B. Direct Wages **' *** ** ***.
2.88.000 14.40
C. PRIME CoST 6,84,000 34.20
D. Factory Overheads (4) 2.85.000 14.25
E. WORKS CoST 9,69,000| 48.45
 324
f Costs and Cost
Solution: Y.B.Com.: SEM.
Cost Accounting (1. YB.Com
h u s t r a t l o n3 3 .

cturing company
Sheets
925
M/s. DOMESTIC APPLIANCES agring
tne year was
20,000givesunits.you the tolowing
Cost Sheet
Paicuas pariculars
Uars fhr
tor the year 2012 Producion and
2014
ELEMENTS OF COST 2013
Produced:2,000 units
Produced:3,000 nits
aterlal
a9rative Overheads
(Fixed)
5,00,000 Factory Overheads
3,00.000adory Overt Particulars
Sold: 3,000 Units prec

24,2,000,0,000000
Sold: 1.800 units Fixed
UnitsUnit Cost|
Total Cost Units Sales Variable 2.00.000
otal Cost No. Unit Cost Proln
5,00,000 ing and Distribution Overheads
4.00.000
A. Direct Material No. Fixed
B. Direct Wages 2,00,0000 2,000
100.00| 3,13,500
50.00155,250| 3,000
3,000
104.50 panas
aS
worked its maximum
decided totoincrease
has deciaed to
Variable
1.20.000

1.80.000
C. PRIME COST 1.00.000 2,000
2,000
150.004,68,750 3,000| e s t i m a t e dt h a t
ncrease capacity of
prodiedcty
production capacity 20,000 units during the year 2012
30,000 untdunng year2013 and tis
D. Factory Overheads 3,00,000 to
25 re will be ali round rise in all
Fixed 30.00 60,000 3,000 he increase variable
Variable 60.000 2,000
2,000
50.00 1.55,250 3,000 20.00 T h e r

no
of 20%% in
all
need change fixed overheads. by 10%.
expenditure
E. FACTORY COST 1.00,000| 230.00 6,84,000
3,000| to
the
2,000
seling price for the year 2013.
c ) The

4,60,000 23.00 55,200 cost Sheet for the year 2012 with
Administrative Overheads 2,000 3,000 Prepare
r the year 2013.
G. COST OF 46.000 253.00 7,39,200| 40 the year 2013 Win
Cost per
unit coler Unt column
H. Less:
PRODUCTION 5,06,000
246.40 Sheet
column. and also prepare estmated os
Closing Stock of Solution :
(T.Y.B.Com., April 2014, adapted
Finished Goods 50.600 200
COST OF 1,800 253.00 7,39,200 3,000
GOODS soLD 4,55,400 39.00| 1,59,840 246.40 COST SHEET
J. Selling Overheads 1,800 3,000| OF COST
K. Distribution Overheads
70,200
1,800 20.00 60,000 3,000 53.28 TEP ELEMENT
L. COST OF SALES
36.000
5,61,600 1,800| 312.00 9,59,040 3,000 20.00
319.68
Production/ Sales Production / Sales
M. PROFIT 1,800 78.00 6,39.360 3,000 20,000 units 30.000 units
1,40.400
1,800 390.00 15,98,400 3,000 213.12
N. SALES
Notes:
7,02,000
S32.80 Direct Materials
Cost
Per Unit
Cost
Per Unit
A. **** *** *****
5,00,000 27.50
(1) Raw Material Cost: Direct Wages 25.00 8,25,000
3. ** * **.
Raw Material P. U. PRIME COST 3,00,000 15.00 4,95,000 16.50
C.
In 2013 100
Add: Factory Overheads
* * *** **

8,00,000 40.00 13.20.000 44.00

Add: Increaseby 10% Fixed **
*** **
*
* 2,00,000 10.00 2.40.000 8.00
110 Variable
4,00,000 22.00
**

20.00 6,60,000
****** **
**

Less: Decrease 5.5 Total Works Overheads

by 5% 104.5 wORKS CoST
*** ***** *****

6,00,000 30.00 9,00.000 30.00

In 2014 74.00
********* 14,00,000| 70.00 22,20,000
(2) Direct wages per unit rises by 3.5%. Add: Office/Administrative Overheads 2,00.000 10.00 2,40,000 8.00
of direct wages as in 2013).
(3) Factory Variable Overheads in 2014 (in proportions coST OF PRODUCTION 82.00
G * *** *** |16,00,000 80.00 24,60.000
Selling & Distribution Overheads
1,55,250x 1.00,000 = 1,55,250 H.
Fixed 4.80
1,00,000
**
**"***
** *** 1,20.000 6.00 1,44,000
Variable Overheads Variable * *** *

1.80,000 9.00 2.97.000| 9 90

Wages
In 2003 1,00,000 1,00,000 Total Selling & Distribution Overheads 3,00,00015.00 4,41.000 14.7
967.70
In 2004 1,55,250 TOTAL COST/CoST OFSALES ***
19,00,000 95.00 29.01,000
J. PROFIT * * * * * * ***

5,00,000 25.00 6,99,000 23.30

Total (1,55,250+ 60,000) 2,15,250 120.00
24,00,000 120.00 36,00,000
(4) Administrative overheads will increase by 20% i.e. 20% rise in the amount of administrative K. SALES *** *** *** " **

expense.
(5) Selling overheads as a percentage of sales is 10% in 2013. Profit is 40% of sales (given) Wlustration 34 Ltd. in the year
revealed from the costing records of M/s Jupiter& Co.
Let sales be 100. Following particulars are

2014
Selling overheads (10% of 100) 10 Production 15,000 Units
Total cost excluding selling overheads wil be 50.
Cost Sales Particulars * * * *
3,00,000
50 100 Raw Material Cost ** *** ***. 1,80,000
(246.4+ 20.00) 266.40 1,20,000
?(532.80) Labour Cost ***

60,000
Selling price per unit 532.80 Factory Overheads * * * * * * * * * *

Office Overheads * **" **** 15,000

Sales 532.80 x 3,000 = 15,98,400
Selling overheads 10% of 15,98,400 = 1,59,840 Selling Expenses
 n of
Costs and Cost Sheetn
326
35
Rate of Cost Acconting (T.Y. B. Com. : msratio nanulacturer
profit 25% on
SEM. A u t oL t d .
are
g i v e n0 e l o w
is a
mE
of auto
cormponerta and the
Now the selling price.
maternais management
will be decided
decided produce
to
producelabour
20,000 units
zu
in 2015. As
per Co.8 estmate, cost a
detals dof ts
09tals ts epenses tor the yea 2010
erger
charges are fixedincreased a st wil increase by 15%. 50% of thculars
25%.
by
and the rest n d
is variable.
cost also n
wil also
g expenses t unit will aiso De of overhead
per Stock of Material
There will be no hes reduced bu OpaStock of Materia
Closin se of Material
change in rate of profit. 1.50900

pare Cost
Statements for both the years 2014 and 2015. (ICWA Inter, Dec. 15, pirect Labour
2.00 000
Solution adapted) a c t o r y

strative
Administralive
Overh
rhead

Overhead
14 50.90
950.c0
n t ot Cost and Profit (Cost Sheet) For the Year Ended 31-3-2014 5. 3.80.000
(Output: 15,000 Units]
During2015, the
Company nas
received an order
and Labour will 2.50400
be ? from Car nufacturer where t estimates tha
a
STEP ELEMENT
OF CoST Total Cost| Unit Cost
theC o s to f

ove
d as a
Percentage ot
8,.00,000 and?
Direct Labour 4 Manufacturer
50.000 respectvely
based on previous years and
LId. chargs
Administrattve Overheads Percertage
of distrattve
Cost nf
cost. Cost 29rcertage
delivery of the Ove
as a
facois estimated at 7 45,000as Cost.
Raw Materials * * * * " ***
3,00,000
20.00
Premise
of
equired to- compo at Customa
Labour 1.80,000| are
12.00 the Overhead
Y O Ua r
*** *** *** ** **.

Cost Hecovery Rates based on actual costs tor 2014.

PRIME CoST 4,80,000 ealcula detailed
D
*** **'

1,20,000 | 32.00
Add : Factory
WORKS coST
Overheads ** ***
6,00,000 8.00 for 10e
Preparepany wants to eam a profit of Statement
the orderecerved in 2015 and the price to be qucted
received in 2015
Add Office Overheads
*****

60.000 40.00 and

(CA Inter, Nov 15, adapted)
G. CoST OF PRODUCTION
**

6,60,0000 4.00 Solution

H.
**

44.00 Recovery Rate

Add Selling Expenses 15.000
v e r h e a d

cOST OF SALES
***

6,75,000 1.00 t o r y Overhead Recovery Rate

45.00
U. Add : PROFIT x Cost)
(33, 2,25.000 15.00 Factory Overheadsin 2014
SALES 9,00,000| 60.00 Direct Labour Cost in 2014
00 3,80.000 x 100
Statement of Cost and Profit (Cost Sheet) For the Year Ended 31-3-2015 Direct Labour 9,50,000
40% of
[Output:20,000 Units] dministrative Overhead Recovery Rate

Total Administrative Overheads in 2014

STEP ELEMENT OF COST Cost| Unit Cost Factory Costs in 2014 (WN) x 100 =2.50.400
(Note) Cost
a1 30.000 «100
A Raw Materials 1) 5,00,000 8% of Factory
* * * * * ' *** *** ***

25.00
.
.
Labour **** *** **
(2) 2,76.000 .80 Working Note
PRIME CoST *** **' **'****

7,76,000P 38.80
. Add: Factory Overheads ***** ** ** ***
(3) 1,40.000| 7.00 Particulars
. wORKS cOST **** *** *** ***
9,16,000 45.80 Stock of Mater
Add Office Overheads (4) Opening 1,50,000
*** *** **|
70.000 50 P u r c h a s e of Material
****

18.50,000p
G. COST OF PRODUCTION 9,86,000 Add:
49.30 Closing Stock of Material
H. Add: Selling Expenses (5) 15,000 Less: 2.00.000
O.5
****** *****

COST OF SALES
Material C o n s u m e d
18.00.000
|10,01,00o
**

50.05 Direct Labour 950.0000

Add PROFIT (33, x Cost)
SALES
***** *** * * '**. 3,33.600 16.68 Prime Cost 27,50,00o
K. 13,34,600 66.73 Factory O v e r h e a d
****

3,80.000
Working Notes Factory Cost 31.30.000
1. Raw Materials = 7 20 x 125% x 20,000 = 7 5,00,000
Statement for the Order received from M.L. Auto Ltd. during 2015
2.
Labour =7 12 x 115% x 20,000 =
72,76,000 (i) Detailed Cost

3. Factory Overheads ,120,000 ie. 60,000 60,000

x 20,000 i.e. 780,000
Particulars
8,00,0000
= 7 1,40,000
15.000 Material
Labour
* * *
**

*
4,50,000
1.80.000
Factory Overhead (40% of 4,50,000)
4. Office Overheads 60,000
2
ie. 730,000 30,000 x 20,000 i.e. ? 40,000 Factory Cost
***

**
*** * ** ***. 14,30,000
1,14,400
= 70,000
15,000
Administrative Overhead (8% of R 14,30,000) * * *
45.000
5. Cost of Delivery 15,89,4000
Seling Expenses IR =
1x (100 25)%} x 20,000] 7
****
=
15,000 Total Cost 15,89,400 1,76.600
of cost or 1/9 of
***
**

** **
Sales or 11.11%
Add: Profit 1 0 % of R 15,89,400/0.9)
for the order)
* * * * 17,66,000
ales Value (Price to be quoted
profit of 10% on sales.
wants to e a n a
17,6,000 ifthe company
Hence the price to be quoted is