M/S Favourite industries Ltd.,Faizabad produce auto parts .

From the following

particulars prepare cost sheet for the period ended 31 st December 2009

Opening stock of raw materials 20,000

Raw materials purchased 70,000

Closing stock of raw materials 15,000

Direct labour cost (20%of factory on cost)

Factory on cost 30,000

Administrative overhead (10%of works cost)

Selling and distribution expenses 10,000

Details of the finished goods are as follows ..

opening stock of finished goods 2000 units 25,000

Finished goods produced during the period 20,000 units

Closing stock of finished goods 4000 units

You are required to find out the profit made during the year @10% on selling price .

Note:1)There was no balance of opening or closing stock of work in progress .

2)show the working of profit ascertained

2. The accounts of Zia manufacturing co.,Nashik for the year ended 31 st

December ,2008

Shows the following :

Drawing office salaries 6,500

Counting house salaries 12.600

Cash discount allowed 2,900

Carriage and carriage outwards 4,300

Carriage and carriage Inwards 7,150

Bad debt written off 6,500

Repairs of plant ,machinery and tools 4.450

Rent,rates,taxes and insurance –factory 8,500

Rent,rates ,taxes and insurance –office 2000

Sales 4,61,100

Stock of materials -31st dec 2008 62,800

Stock of materials -31st dec 2007 48,000

Materials purchased 1,85,000

Travelling expenses 2,100

Travellers salaries and commission 7,700

Productive wages 1,26,000

Depreciation –plant ,machinery and tools 6.500

Depreciation-furniture 300

Directors fees 6000

Gas and water –factory 1,200

Gas and water –office 400

Managers salary (3/4 Factory and ¼ office ) 10,000

Genral expenses 3,400

Income –tax 1000

Dividend 2,000

Prepare statement giving the following information:

1)materials consumed ;2) prime cost 3) factory on cost and the

percentage on wages 4)genral on cost and percentage on factory cost 5)total cost
6) net profit

3. Tata ltd ,tatanagar produces a standard product .The following information is given to
you from which you are required to prepare cost sheet for the period ended 31 st july 2009.
Opening stock of raw materials 10,000

Purchases of raw materials 85,000

Closing stock of raw materials 4000

Direct wages 20,000

Other direct expenses 10,000

Factory overheads 100%of direct labour

Office overheads 10%of works cost

Selling and distribution expenses Rs .2 per unit sold

Finished products :

In hand at the beginning of the period 1000(value Rs .16,000)

Produced during the period 10,000

In hand at the end of the period 2000

Also find out the selling price per unit on the basis that profit mark up
is uniformly made to yield a profi t of 20% of the selling
price . There were no work –in progress either at the beginning or at the end of
the period.

4. The following details have been obtained from the cost records of cement India
ltd ,Chennai for one month .

Stock of raw materials on 1st april 2009 75,000

Stock of raw materials on 30 april 2009 91,500

Direct wages 52,500

Indirect wages 2,750

Sales 2,11,000

WIP 1-4-2009 28,000

WIP 30-4-2009 35,000

Purchase of raw material 66,000

Factory rant ,rates & power 15,000

Dep.on plant & Machinery 3,500

Exp.on Purchase 1,500

Carriage outward 2,500

Advt. 3,500

Office rent & taxes 2,500

Travellers wages and commission 6,500

Stock of finished goods 1st april 2009 54,000

Stock of finished goods 30th april 2009 31,000

Prepare cost sheet for the month ended 30th april 2009 .

Q.8 Following information has been obtained from the records of Quality Manufacturing Co.,

Bandra.

1-1-2008 31-12-2008

Rs. Rs.

Stock of Raw materials 40,000 50,000

Stock of Furnished goods 1,00,000 1,50,000

Stock of Work - in - progress 10,000 14,000

Other Particulars :

Indirect labour 50,000

Lubricants 10,000

Insurance on plant 3000

 Purchase on raw materials 4,00,000

Sales commission 60,000

Salaries of salesman 1,00,000

Adminstrative Expenses 1,00,000

Carriage outward 20,000

Power 30,000

Direct labour 3,00,000

Depriciation on machinery 50,000

Factory rent 60,000

Property tax on factory building 11,000

Sales 12,00,000

Prepare a statement f cost and profit showing :

(i) Value of raw material consumed (ii) Prime cost

(iii) Fctory cost (iv) Cost of production

(v) Cost of sales (vi) Profit

Q.9 The following information are received from the book of ABC Co. Ltd., Allahabad for

The quarter ending 31-3-2009.

Rs.

Stock of materials 31-3-2009 75,000

 Purchase of material 7,95,000

Stock of material on 1-1-2009 1,05,000

Travelling Expenses 5,100

Carriage Inward 8,290

Carraige outward 9,150

Labour Welfare Expenses 14,200

Depriciation on plant 18,000

Factory rent 11,200

Office rent 29,100

Bad debts 9,000

Productive wages 2,27,000

Teravellers’ Salary and commission 9,000

Expenses regarding purchase of materials 4,500

Director’s Fees 8,700

Fuel, gas and water 17,900

Manager’s salary 18,000

(He devotes 2/3of his time to factoy)

Air conditioning charges of Office 9,000

Outstanding productive wages 33,000

Sales 14,29,500

Prepare cost sheet giving

(i) Prime cost, (ii) works cost, (iii) cost of production, (iv) Total cost
Q.10 The following data have been extracted from the books of Sunshine Industries Ltd.,

Surat for the year 2009.

Rs.

Opening stock of raw materials 25000

Purchase of raw materials 85000

Closing stock of raw materials 40000

Carriage inward 5000

Wages-direct 75000

Wages – indirect 10000

Other direct charges 15000

Rent and rates-

Factory 5000

Office 500

Indirect consumption of material 500

Depreciation –

Plant and machinery 1500

Office furniture 100

Salary –

Office 2500

Salesman 2000

Other factory expenses 5700

Other office expenses 900

 Manager’s remuneration 12000

Bad debts written off 1000

Advertisement expenses 2000

Travelling expenses of salesman 1100

Carriage and freight outward 1000

Sales 250000

Advance income tax paid 15000

Cash discount 5000

The manager hasthe overall charge of the company and his remuneration is to be allocated at
Rs. 4000 to factory, Rs. 2000 to office and Rs. 6000 to the selling expenses.

From the above particulars prepare a statement showing :

(i) prime cost (ii) factory cost (iii) cost of production

(iv) cost of sales (v) net profit.

Q.11 The accounts of machine manufacturing Co., Mahim disclose the following information for

six weeks ending 31st December 2008.

Rs.

Materials used 150000

Productive wages 120000

Factory overhead expenses 24000

Establishment and general expenses 17640

Prepare the cost sheet of the machines. The company is about to send a tender for a machinery.

The costing department estimates that the materials required would cost Rs. 1250 and
expenditure in productive wages Rs. 750 and direct expenses Rs. 500. The tender is to be made
at a profit of 20% on selling price.

Show what the amount of tender would be if based on above percentages.

Q.12 Prav. Electricals Ltd., Pune provides the following information for 10000 T.V valves

Manufactured during the year 2008-2009.

Rs.

Materials 90000

Direct wages 60000

Power and consumable stores 12000

Factory and indirect wages 15000

Light of a factory 5500

Defective work (cost of rectification) 3000

Clerical salaries and management expenses 33000

Selling expenses 5500

Sales proceeds of scrap 2000

Plant repairs, maintainence and depreciation 11500

The net selling price was Rs. 31.60 per unit and all units were sold .

As from 1st April 2009 the selling price was reduced to Rs. 31 per unit and it was
estimated that production could be increased in by 10%.

You are required to prepare :

(i) cost sheet for the year 2008-2009 showing various elements of cost and cost
per unit

(ii) Estimated cost (tender) and profit for 2009-2010.

Assuming that 15000 units will be produced and sold during the year and factory overheads will be
recovered as a percentage of direct wages and office and selling expenses as a percentage of works cost.
13. Opening stock if material 30000

Purchases 50000

Closing stock of material 10000

Productive wages 30000

Factory expenses 10000

Office expenses 11000

Selling and distribution expenses 16500

Prepare a cost sheet from the above data & also calculate

(i) Percentage of factory expenses to wages.

(ii) Percentage of office expenses to factory cost

(iii) percentage of selling & distribution expenses to factory cost.

The firm has to send a tender. It is estimated that required cost Rs.20000 and wages Rs.9000.

Tender has to made at 10% profit on cost.

14. Reliable co. Raipur manufacturers pressure cookers and from their cost record we
Ascertain the following data for the half year ended 31.12.2008

Opening stock of finished goods as on 1.7.2008 NIL

Closing stock of finished goods as on 31.12.2008 46000

Opening stock of raw material as on 1.7.2008 10000

Closing stock of raw material as on 31.12.2008 6000

Raw material purchased 40000

Direct wages 90000

Indirect expenses 15000

Sales 80000
The no. of pressure cookers manufactured were 600 pieces for the half year ended

31.12.2008. what price should company quote for the supply for 500 pressure cooker.

So that the company maintains the same percentage of profit as received during six

Months period ended 31.12.2008. it is assumed that there is no change in the price of

Raw material or direct wages and expenses.

15. From the following particulars of Premier Gas Lighter Co., Pune for the half year ended
30.06.2009. Prepare a statement of cost.

Stock of raw material as on 1.1.2009. 20000

Stock of raw material as on 30.6.2009 5000

Raw material purchased 45000

Wages of factory workers 80000

Factory overheads 15000

Office and administrative exp. 6000

Finished stock as on 1.1.2009. NIL

Finished stock as on 30.6.2009 25000

Sales 156400

The no. of gas lighter produced were 2000 during the period ended 30.6.2009. the

Company has to received an order for supply of 4000 gas lighter till 31.12.2008.

During the period of executing the order the material cost is expected to rise by

20% and the cost of wages has to be raised by 15%. However the overheads will

Remain same.

Assuming the same percentage of profit to be earned as during the period ended

30.6.2009. state the price to be quoted for the supply of 4000 gas lighters.
16. Vijaya Ltd. Varanasi manufacturers 200 washing machines during the year 2009. The

Following are the details of cost:

Materials consumed 200000

Wages 220000

Salaries 100000

Factory overheads 80000

Rent , rates & taxes 20000

Selling & distribution exp. 50000

General exp. 40000

Sales 1000000

The co. has received an enquiry from KUWAIT for the supply of 3000 washing machines

For the year 2010. Prepare a statement showing the estimated cost for 3000 machines

& price per machine to be quoted so that a profit of 20% on the cost price is derived.

The co. expects the following rise in cost for the year2010.

(i) raw material price will increase by 10%

(ii) wages cost will rise by 5%

(iii) factory overheads will rise by 20%

(iv)selling and distribution exp. Will rise by 10%

However the company does not expect rise in other costs which will remain unaffected

Due to the rise in output.

17.Plasant Co. Ltd. Pune manufactured & sold 1000 refrigerators in the year ended 31 st march2009.

The summarized Trading and Profit &Loss Account is set out below:

To cost of materials 80000 By sales 400000

To direct wages 120000

To manufacturing cost 50000

To G/P C/D 150000

Total 400000 Total 400000

TO management & By gross profit B/D 150000

Staff salary 60000

To rent rate

& insurance 10000

To selling exp. 30000

To general exp. 20000

To net profit C/D 30000

Total 150000 Total 150000

For the year ended 31st March 2010 it is estimated that:

(i) output & sales will be 1200 refrigerators.

(ii)price of raw material will rise by 20% on the previous years level.

(iii)wages rates will rise by 5%

(iv) manufacturing cost will rise in proportion to the combined cost of materials wages.

(v) selling exp. Per unit will remain unchanged.

(vi)other exp. Will remain unaffected by rise in output.

You are required to submit a statement to the board of directors showing the price at which the
refrigerator should be marked so as to show profit of 10% on selling price.
18 The following are the costing records for the year 2009 of a manufacturer :

Production 1000 units cost of raw materials Rs. 20000

Labour cost Rs. 12000 factory overhead Rs. 8000

Office overhead Rs. 4000 selling overhead Rs. 1000

Rate of profit on selling price – 25%

The manufacturer decides to produce 1500 units during the year 2010. It is estimated
that the cost of raw material will increase by 20% and labour cost will increase by 10%. 50% of overhead
are fixed and the other 50% are variable. The selling expenses per unit will be reduced by 20%. The rate
of profit will remain same.

Prepare a cost statement for the year 2010 showing the total cost and the selling price per unit.