SPECIMEN OF COST SHEET

ABC Ltd
For the year ended
Production (units)
Units Total Cost
cost per
Unit
Cost of direct material consumed:
Opening stock
Add: purchases
transfer from other dept./ job etc.
carriage inward/Freight
Transit Insurance
GST/Custom Duty, Dock Charges etc
Primary packing materials
Development expenses incurred in
respect of materials

Less: transfer to other dept./job etc.

material lost/ damaged
material sold
Abnormal cost/wastage of materials
return outward
closing stock of Raw material
cost of Direct materials consumed

Direct Employee(labour)cost/Productive
wages:
Add: Welfare funds such as ESI,PF, EX-Gratia,
Cost of subsidised food, Bonus, Gratuity, etc.

Direct (chargeable) expenses.

Add: Royalty on production
Loosetools/equipments/mouls
Hire charges for tools/ equipment
Cost of patents/copyright
PRIME COST
Works/Factory overhead:
Indirect material
Indirect/ unproductive wages
Overtime wages
Oil, waste, grease etc
Power and fuel/Coal, gas, water, steam
Consumable stores
INTRODUCTION TO COST ACCOUNTING Page 1 of 20
 Motive power
Foremen salary/works manager/stores
keeper/supervisor/Inspector
Loosetools written off
Works stationery
Canteen and workers welfare expenses
Recreation expenses
Repairs/maintenance
Security / time keeping expenses
Internal transport (haulage)
Works expenses
Depreciation on Plant machinery/ factory
building/tools and equipments
Drawing office salary/expenses
Design office expenses
Technical director fees
Purchase/ service department expenses
R & D expenses
Workers training / recruitment expenses
works manager bonus
Material handling
Normal loss of material
Normal idle time cost
Cost of Rectification of defectives

Less: Sale of scrap / defective work

Add: Opening W-I-P

Less: Closing W-I-P

WORKS/FACTORY COST
Add: Office & Administrative overheads

Office salaries
Office rent, rates and taxes
Office lighting
Directors fees
Printing & stationery
Postage & telegraph
sundry office expenses
Depreciation and repairs office equipments
Subscription to trade periodicals
Establishment charges
Legal charges and Audit fees

INTRODUCTION TO COST ACCOUNTING Page 2 of 20

 Counting house expenses/salaries
Bank expenses
PRODUCTION COST/COST OF PRODUCTION
Add: opening stock of finished goods

Less: closing stock of finished goods

COST OF GOODS SOLD

Add: Selling and distribution overhead:
Selling and commission of sales staff
Showroom expenses
Advertising, free samples and free gifts
Cost of Catalogues and folders
Carriage outward
Packaging expenses/ container expenses
Trade/ fair / exhibition expenses
Collection charges
Travelling expenses
Warehousing expenses
Sales office rent, Depreciation
Samples and free gifts
Upkeep of delivery van
Deliver salary of delivery van
Depreciation of delivery van
Finished stock insurance
After-sales expenses
Sales director expenses

Other interest and financing charges for

production of goods/operations or services as
per CAS-17( only Net cost)
Interest on bank loan
Cash discount allowed on sales

COST OF GOODS SOLD/ COST OF SALES/TOTAL

COST
PROFIT (or LOSS)
SALES

1. 'Other interest and financing charges' means interest and financing charges not directly
attributable to the acquisition/construction/production of a qualifying asset'. [Cost Accounting
Standard -17, (CAS-17)]

2. Only the net interest and finance charges are to be included in cost means
subsidy/grant/incentive or amount of similar nature received/received with respect to interest
and financing charges if any, shall be reduced.
INTRODUCTION TO COST ACCOUNTING Page 3 of 20
 Cost Sheet – Problems
1. How do you treat the following items while preparing the cost sheet?
1) Commission on sales 7) Milk used for making ice-cream
2) Legal Charges 8) Nails used in shoes
3) Unproductive wages 9) Income tax
4) Cost of Special Design 10) Drawing office salary
5) Estimating expenses 11) Chargeable expenses
6) Warehouse salaries 12) Interest on loan

2. Calculate the Prime cost, Factory cost, Total cost of production and Cost of
Salesfrom the following particulars (₹)
Raw material consumed 40000
Wages paid to labourers 10000
Directly chargeable expenses 2000
Oil & Waste Cotton 100
Wages of Foreman 1000
Store keepers wages 500
Electric power 200
Lighting
Factory ₹ 500, Office ₹200
Rent
Factory ₹ 2000, Office ₹ 1,000
Repairs & Renewals:
Factory Plant 500
Machinery 1000
Office Premises 200
Depreciation:
Office premises 500
Plant & Machinery 200
Consumable Stores 1000

INTRODUCTION TO COST ACCOUNTING Page 4 of 20

 Managers Salary 2000
Directors fees 500
Office printing and stationery 200
Telephone charges 50
Postage and telegrams 100
Salesman’s Commission 500
Travelling Expenses 200
Advertising 500
Warehouse charges 200
Carriage outward 150
Sales (10000 units) 75000

3. From the following particulars prepare a cost sheet showing the total cost per tonne
for the period ended 31st Dec 2018
(₹)
Raw Materials 36000
Productive Wages 35000
Direct expenses 3000
Unproductive wages 10500
Factory rent and taxes 7500
Factory lighting and heating 3700
Power 4900
Directors fees(works) 1000
Directors fees (office) 2000
Sundry Office Expenses 1000
Stationery:
Office- 900
Factory-750 1650
Depreciation:
Plant - 2000
Office Building 1000
Loose tool- 600 3600
Insurance: 1600
Office 500
Factory 1000
Warehouse Rent 300
Bad debts 100

INTRODUCTION TO COST ACCOUNTING Page 5 of 20

 Advertising 300
Sales Department Salary 1500
Commission on Sales 1500
The total output for the period has been 18424 tons.

4. From the following information, prepare cost sheet ascertaining the cost under the
following divisions of cost:
a) Prime Cost b) Works Cost c) Total Cost d) Selling price
Direct Materials:
Paper pulp 500 tons at ₹ 50 per ton
Other materials 100 tons at ₹ 30 per ton
Direct Labour:
80 skilled men at ₹ 3 per day for 25 days
40 unskilled men at ₹ 2 per day for 25 days
Direct Expenses:
Special Equipments: ₹ 3000
Special dies: ₹ 1000
Works overhead:
Variable: 100% on direct wages
Fixed: 50% on direct wages
Administration Overhead at 10% on works cost
Selling and Distribution overhead at 15% on works cost
Profit on 20% on selling price. Finished Paper manufactured 400 Tons.
Credit on account of scrap sold ₹ 800. Selling rate to be ascertained to the nearest
rupee.

5. M/s Sanjan Sales Corporation supplies you the following figures and information
relating to a product during the month of January 2022
Material Consumed ₹ 30000
Direct Wages ₹ 18000
Machine hours worked 1800 Hrs
Machine hour Rate ₹5
Administrative overhead 20% on works cost
Selling overhead ₹ 1 per unit
Units produced 17100
Units sold 16000 units at ₹ 8 per unit
Prepare Cost Sheet.

INTRODUCTION TO COST ACCOUNTING Page 6 of 20

 6. Supreme Feeds furnish the following particulars form its cost records for the monthof
January, 2021
Stock as on 01 Jan 2021 31 Jan 2022
Raw materials 100000 123500
Finished goods 71500 42000
Work in progress 31000 34500
Transactions for the month:
Purchase of raw material 88000
Direct wages 70000
Works expenses 39500
Administrative expenses 13000
Sale of scrap 2000
Selling and distribution expenses 15000
Sales 284000
Prepare a cost sheet showing:
a) Cost of Raw material Consumed
b) Prime Cost
c) Factory Cost
d) Cost of Production
e) Cost of Goods Sold
f) Cost of sales
g) Profit

7. The following particulars are extracted from the costing records of Zenith manufacturing
company for the year ending 31.12.2022. ₹
Purchase of Raw Materials 480000
Carriage Inward 8000
Productive wages 392000
Stock on 01.01.2022
Raw Materials 80000
Finished goods (1600 tons) 64000
Work-in-progress 19200
Stock on 31.12.2022
Raw materials 88000
Finished Goods(3200 tons) ----
Work-in-progress 64000

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 Works overheads 168000
Salaries(Office) 14000
Office Rent and taxes 6000
Printing & Stationery 4000
General expenses 8000
Sales(finished goods) 1200000
Advertising, discount allowed and selling costs etc are ₹4 per ton sold. During the
year 25600 tons of the products were produced.
Prepare:
Statement of Cost of Production showing the cost per ton.

8. The following particula₹ were extracted from the costing records of Sonu Manufacturing
Company for the year ending 31st December 2021

Purchase of materials 960000

Productive wages 784000
Carriage inwards 16000
Motive power 30000
Unproductive wages 100000
Gas and water 30000
Depreciation on plant 50000
Factory lighting 20000
Haulage 10000
Productive design expenses 10000
Factory Rent 60000
Repairs on plant 26000
Salaries Factory 28000
Office rent and taxes 6500
Audit fees 5500
Office Managers Salary 4500
Printing and Stationery 3500
General Expenses 16000
Sales(finished goods) 2400000

Stock On 1.1.2021 On 31.12.2021

Raw material (₹) 160000 176000

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 Finished Goods(₹) 128000 ----
Finished Goods (tons) 3200 6400
Work in progress 38400 128000
Advertising, discount allowed and selling cost etc are ₹ 4 per ton sold. During
the year 51200 tons of the products were produced. Prepare a statement of
costof production showing the cost per ton and profit for the period.

9. The following details are available from the books of Shubhashaya Sea Products Ltd
for the year ending 31st Dec 2022

Direct Wages 600000

Purchase of materials 720000
Other materials 36000
Carriage 8640
Wages of foreman and Store 48000
keepers
Other indirect wages 6000
Cost of research and experiments 30000
Office managers salary 72000
Employees State insurance 6000
Power, fuel and haulage 54000
Drawing office expenses 36000
Printing and stationery 12000
Counting house salary 12000
Sales 1800000
Stock (1.1.2022)
Raw materials 120000
Work-in- 28800
progress 6000
Finished products(Units)
Stock (31.12.2022)
Raw materials 133440
Work-in- 96000
progress 12000
Finished products(Units)
Income tax 22000
Donation 5000

INTRODUCTION TO COST ACCOUNTING Page 9 of 20

 Selling and Distribution expenses are to be charged at Rupee 1 per unit. During the
year 2001 units produced are 96000.
Prepare a cost sheet showing the different elements of cost and the profit.

10. Following particulars are available in respect of product “X” for the year ending 31st
December 2010. ₹
Stock on 1.1.2010:
Raw materials 40000
Finished goods 4000 units ------
Work-in-progress 9600

Stock on 31.12.2010:
Raw materials 44480
Finished goods 6000 units ------
Work-in-progress 32000

Purchase of raw materials 240000

Indirect materials 12000

Work Manager’s salary 16000

Direct wages 120000

Carriage inwards 2880
Printing and stationery 4000

Indirect wages 2000

Office salary 24000
Research and experiment cost 10000
Counting house salary 4000
Employee state insurance 2000
Other factory expenses 22000

Cost of defective work 3800

Coal, gas, water 6400
Audit fees 3000
Goodwill written off 2000
Underwriting commission 1000
INTRODUCTION TO COST ACCOUNTING Page 10 of 20
 Interest on bank loan 1500

Legal charges 6000

Sales 575000

Advertising and selling cost is ₹ 2 per unit. Total units produced are 36000. Prepare a
cost sheet and show the cost and profit per unit of product X.

11. The following particulars are obtained from the books of Sunshine Ltd for the year
ended 31.12.2022

₹
Purchase of materials 42500
Productive wages 32500
Unproductive wages 3000
Motive power 2000
Loose tools written off 250
Chargeable expenses 2500
Carriage inwards 650
Reserve for bad debts 1600
Bad debts 500
Telephone Charges 200
Work stationery 750
Material sold as scrap 350
Sale of scrap(factory) 150
Loss by fire(material) 1800
Carriage outwards 100
Debt collection charges 230
Office expenses 4800
Showroom rent 400
Welfare services 1000
Estimating expenses 325
Haulage 325
Water supply 125
Rectification cost of defectives 75
Samples and free gifts 550
Upkeep of delivery van 400
Commission on sales 625
Warehouse rent 445

INTRODUCTION TO COST ACCOUNTING Page 11 of 20

 Stock On On
1.1.2022 31.12.2022
Materials(₹) 5500 1500
WIP 7500 5500
Finished goods 27000 -----
(value)
Finished goods 1500 500
(units)
6000 units are sold at ₹ 40 per unit. Prepare a cost statement showing components of cost per
unit and the profits. Closing stock of finished goods is to be valued at current’s factory cost.
12. Akashdeep Ltd furnishes the following for the month of September 2017.
₹
st
Stock on 31 Aug 2017:
Materials 15000
W.I.P 14000

Stock on 30th Sept

2017:W.I.P 15200
Finished Stock 1000 units
Purchases 97000
Direct wages 96000
Factory Supplies 8000
Trade magazine 1600
Managers Salary 16600
Depreciation- Furniture 1800
Debenture Interest 4500
Sales (15000 units) 315000
Finished Stock Insurance 2400
Delivery van expenses 3500
Sales office expenses 2800
Donations 5000
Stores expenses 6500
Material handling 2500
Loss on sale of Office furniture 250
Cost of defective work 3800
Coal, gas, water 12400

INTRODUCTION TO COST ACCOUNTING Page 12 of 20

 Audit fees 3000
Goodwill written off 2000
Underwriting Commission 1000
Interest on Bank Loan 1500
Legal Charges 1000
Samples 2500
Packing 1600
Show room expenses 2200
Prepare Cost Sheet showing Cost of Production and profit per unit of output.
13. Deepak Ltd furnishes the following for the month of Sept 2014.
₹
1st
Stock on Sept 2014
Materials 25000
W.I.P 24000
Finished stock-400 units 16000
Stock on 30 Sept 2014
W.I.P 28200
Finished stock-5000 units ------
Purchases 85000
Direct Wages 96000
Factory supplies 19000
Counting house salary 16000
Managers salary 26600
Depreciation-furniture 3800
Debenture Interest 4500
Sales (19000 units) 440000
Finished stock insurance 2400
Delivery Van Expenses 3500
Sales Office Expenses 12800
Donations 5000
Stores expenses 6500
Material handling 4500
Loss on sale of office furniture 250
Cost of defective work 5800
Coal, gas and water 6400
Audit fees 8000
Goodwill written off 2000
INTRODUCTION TO COST ACCOUNTING Page 13 of 20
 Underwriting commission 1000
Interest on Bank Loan 1500
Legal charges 8000
Samples 4500
Packing 8600
Show room expenses 2400
Prepare Cost Sheet showing Cost of Production and Profit per unit of output.

14. The following figures are extracted from the Trial Balance of Maharatna Company on
30th September 2018.

Particulars ₹
Inventories:
Finished stock 80000
Raw material 140000
W.I.P 200000
Office appliances 17400
Plant and machinery 460500
Building 200000
Sales returns 14000
Heat, light power 65000
Sales Commission 44600
Distribution Department expenses 18000
Sales 768000
Purchases 320000
Freight on purchases 16000
Purchase returns 4800
Direct Labour 160000
Rates and taxes 6300
Factory supervision 60700
Office expenses 8600
Sales promotion 22500
Further details:
1) Closing inventory:
Finished goods 115000
Raw materials 180000
W.I.P 192000
2) Accrued expenses on : Direct Labour ₹8000, Factory supervision ₹ 1200
3) Depreciation to be provided on: Office appliances 5%, Plant and Machinery 10%,
INTRODUCTION TO COST ACCOUNTING Page 14 of 20
 Building 4%
4) Distribution of the following costs:
Heat, light, power to factory, office and selling and distribution in the ratio of
8:1:1
Rates and taxes – 2/3 to factory, 1/3 to office.
Depreciation on building to factory, office and selling in the ratio of 8:1:1
With the help of the above information, you are required to prepare statement
showing the cost and profit for the year ending 30th September 2018.

Estimated Cost Sheet- Tenders and Quotation

1. Mr. Bhagath a manufacturer of Pedestal fans finds that in 2019, it costs him ₹ 720000 to
manufacture 175 pedestal fans, which he sold for ₹ 5400 each. The cost was made up of:
₹ ₹
Materials 282000 Direct Wages 324000

Factory Overheads 48600 Office Overheads 65460

For the next year he estimates that:

a. Each Pedestal fans will require materials of ₹ 1600 and labour ₹ 1800
b. The factory overheads will bear the same relation of wages as in the period and
c. The office overheads percentage on factory cost will be the same as in the past.
Prepare a Statement of Cost showing the profit he would make per unit, if he
reduces the price of Pedestal fans by ₹200.

2. The following are the costing records for the year 2019 of a manufacturer:
Production 10000 units, Cost of materials ₹ 200000, Labour cost ₹ 120000; Factory
Overheads 80000; Office Overheads 40000; Selling expenses 10000; Rate of profit 25%
on the selling price.
The manufacturer decided to produce 15000 units in 2020. It is estimated that the cost
of raw materials will increase by 20%, the labour cost will increase by 10%, 50% of the
overhead charges are fixed and the other 50% are variable. The selling expense per
unit will be reduced by 20%. The rate of profit will remain the same.
Prepare a Cost Statement for the year 2017 showing the total profit and selling price
per unit.

3. Prepare estimated cost sheet from the following date:

INTRODUCTION TO COST ACCOUNTING Page 15 of 20

 Estimated material ₹ 48000, Estimated labour cost ₹ 54000. It is estimated that the factory
overhead will be 100% of direct wages, Administrative overhead will be 50% of works cost,
Selling and distribution overhead will be 10% on cost of production. The expected profit
will be 33.33% on the sales.

4. Prepare estimated cost sheet from the following data:

Estimated material ₹ 60000, Estimated labour cost ₹ 67000
It is estimated that the factory overhead will be 10% of direct wages, Administrative
overhead will be 50% of works cost, Selling and distribution overhead will be 10% on Cost
of Production. The expected profit will be 25% on the sales.
5. Following are the particulars for the production of 2000 sewing machines for the year
2000.
₹
Cost of materials 160000
Wages 240000
Manufacturing expenses 100000
Depreciation 120000
Rent, rates and insurance 20000
Selling expenses 60000
General expenses 40000
Sales 800000
The company plans to manufacture 3000 sewing machines during 2001. You are
required to submit a statement showing the price at which machines would be sold so
as to earn a profit of 10% on selling price. The following additional information is
supplied.
a) Price of materials is expected to rise by 20%
b) Wage rate are expected to show an increase of 5%
c) Manufacturing expenses will rise in proportion to the combined cost of materials
and wages.
d) Selling expenses per unit will remain the same
e) Other expenses will remain unaffected by rise in output.
(2002, 2004, 2013, 2015)
6. Pleasant Cold Ltd. Manufactured and sold 100 refrigerator during the year ended 31st
March 2004. The summarized trading and profit and loss account is given below:
Trading and Profit and Loss Account for the year ended 31st March 2004
₹ ₹

To Cost of Raw materials 80000 By Sales 400000

To Direct wages 120000
INTRODUCTION TO COST ACCOUNTING Page 16 of 20
 To Manufacturing Costs 50000
To Gross Profit c/d 150000
400000 400000

To Management 60000 By Gross Profit b/d 150000

Expenses
To Rent and Insurance 10000
To Selling Expenses 30000
To General expenses 20000
To Net Profit 30000
150000 150000

For the year ended 31st March, 2005 it is estimated that:

a) Output and sales will be 120 refrigerators.
b) Price of materials will rise by 20% on the previous year’s level.
c) Wages will rise by 5%
d) Manufacturing cost will rise be at 25% of prime cost
e) Selling expenses per unit will remain unchanged.
f) Other expenses will remain unaffected by the rise in output.
You are required to submit a statement for the Board of Directors, showing the
price at which refrigerators would be marked so as show a profit of 20% on selling
price.
7. Production and Sales during the year 2020 was 1000 units.
₹

Direct material 200000

Direct wages 150000
Factory expenses 137500
Administration expenses 60000
Selling expenses 45000
Sales 730000

The following estimates have been made for 2021:

1. Production and sales will be 1500 units
2. Material price per unit will increase by 25% but due to economy in consumption
the cost per unit will reduce by 12%
3. The wage rate per unit will increase by 20%
4. Factory expenses of ₹ 50000 are fixed. The remaining factory expenses will be in
the same proportion to materials consumed and wages as in the previous year.
5. The total administrative expenses will increase by 2/3
INTRODUCTION TO COST ACCOUNTING Page 17 of 20
 6. Selling expenses will be ₹ 90000
7. The profit desired is 20% on sales
Prepare cost statement showing cost and profit for 2020 and 2021.
8. An electric computer manufacturer desired to quote for a contract for the supply of 500
Computers for the year 2014. From the following data prepare a statement showing
the price to be quoted to give the same percentage of net profit on sale as was
realised during the year 2013. ₹
Stock of raw materials 1-Jan 2013 500000
Stock of raw materials 31-Dec 2013 70000
Purchase of raw materials 750000
Factory wages 1500000
Indirect wages 250000
Sales 2700000
Completed Stock 1-Jan 2013 NIL
Completed Stock on 31-Dec2013 500000

The number of compute₹ manufactured during the year 2013 was 200 including those
sold that these in stock at the close of the period. The compute₹ to be quoted are of
uniform size and quality and are similar to those manufactured during 2013. As from
1st January 2014, the cost of factory labour increased by 10% and that of material by
15%.

9. A manufacturer of Narmada Brand Scooter finds that in 2007, it cost him ₹ 2160180 to
manufacture 180 scooters, which he sold for ₹ 2160180 to manufacture 180 scooters,
which he sold for 16200 each. The cost was made up of: ₹
Materials 846000

Direct Wages 972000

Factory on cost 145800

Office overhead 196380

For the next year he estimates:

That each scooter will require materials of ₹ 4800 and labour ₹ 5400. That the
factory on cost will bear the same relation to wages as in the previous period.
That the office overhead percentage on factory cost will be the same as in the past.
Prepare a statement showing the profit he would make per unit, if he reduces the
prices of the scooter by ₹600.

INTRODUCTION TO COST ACCOUNTING Page 18 of 20

10. Bharath Printers has been asked to quote the price for supplying 2000 invitation cards.
The cost records for 1000 invitation cards of the firm give the following information
for the month of August 2007.
Direct Materials ₹ 4000
Direct wages ₹ 3000
Production Overheads ₹ 1500
Sales 1000 cards at ₹ 10 each. You are required to quote the price for 2000 cards
(similar) considering the following:
1) Materials cost to increase by 5%
2) Labour rate to increase by 10%
3) Production overheads to be absorbed on the basis of direct wages
4) Profit percentage on sale to remain the same.

11. Gujarat Cables Ltd furnishes the following information for the year 2010.
Output: 4000 tons
Particulars ₹

Materials:
Purchases 86000
Opening Stock 4000
Closing Stock 10000
Wages 48000
Production Overhead 32000
Administration Overhead 16000
Selling and distribution overhead 4000

Rate of profit-25% on selling prices.

It is estimated that production can be increased in 2011 by 50% due to spare capacity.
Raw material prices will increase by 20% and wages will increase by 10%. The rate of profit
will remain the same. 50% of all overheads are fixed and other 50% are variable.
Prepare a statement of cost for 2010 and estimation for 2011 showing cost, profit and sales.

12. The following data relates to an output of 10000 units manufactured:

₹

INTRODUCTION TO COST ACCOUNTING Page 19 of 20

 Materials 90000
Direct wages 60000
Power 12000
Factory Indirect wages 15000
Factory Lighting 5500
Selling Price per unit 32
Rectification cost of defectives 3000
Office Salary 33500
Selling expenses 5500
Sale of Scrap 2000
Plant Repairs 11500

For the next year, the selling price could be reduced to ₹ 31. It is estimated that
production can be increased by 50% due to spare capacity. Rates of materials and
direct wages will increase by 10%.
You are required to prepare a cost sheet for the current year and also an estimated
cost sheet for the next year assuming that factory overhead will be recovered as a
percentage of direct wages and office and selling expenses as a percentage of works
cost.

13. In respect of a factory the figures have been obtained for the year 2016.
₹

Cost of Materials 200000

Wages 150000
Factory Overheads 120000
Office overheads 148000
Selling Overheads 112000
Distribution Overheads 80000
Profit 250000

A work order has been executed in 2017 and the following expenses have been
incurred.
Materials ₹ 24000 and Wages ₹ 22500. Assuming that in 2017 factory charges have
been increased by 12%. Distribution charges have gone down by 10% and selling and
office overhead have each gone up by 15% at what price should the product be sold so
as to earn the same rate of profit on the selling price of 2016?
Factory overheads are based on direct wages, while all the overheads are based on
factory cost.
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