From the following particulars calculate (1) Prime Cost (2) Factory Cost (3) Cost of

Production and (4) Cost of Sales

Rs. Rs.
33,000 1000
Direct Raw Materials Depreciation of office building
35,000
Direct Wages Depreciation of delivery Van 200

Direct Expenses 3,000 Bad debts 100

Factory Rent and rates 7,500 Advertising 300
Indirect Wages (Factory) 10,500 Salaries of salesmen 1,500
factory Lighting 2,050 Up keeping of delivery Van 700
Factory Heating 1,500 Bank charges loo
Power (Factory) 4,400 Commission on sales
1,500
Office Stationery 900 Rent and rates (Office) 500
Director’s Remuneration (Factory) 2.000 Loose tools written off
600
Director’s Remuneration (Office) 4.000 Output (tonnes)
1000 5,000
Factory Cleaning (sales O Rs.40 per unit)
Sundry Office Expenses 200
Factory Stationery 750
Water supply (Factory) 1,300
Factory Insurance l,l00
Oft2ce Insurance 500
Legal Expenses (Office)
400
Rent of Warehouse 300
 33,000
Direct materials

35,000

Direct wages

3,000
Direct expenses

71,OOO
Prime Cost (1)

Add : Factory overheads

7,500
Factory rent and rates
10,500
Indirect wages
2,050
Factory lighting
1,500
Factory heating
4,4IXI
Power (Factory)
2,000
Director’s remuneration (Factory)
1,000
Factory cleaning
750
factory stationery
1,300
Water supply (Factory)
1,100
Factory Insurance
2,000
Depreciation of Plant & Machinery
600
Loose Tools written ofT 34,700

Works Cost (or) Factory Cost (2)

1,05,7tXi
Add : Office and Administrative Overhead:
900
Office stationery

4,000
Director’s remuneration (Office)
200
Sundry office expenses
500
Office insurance
400
Legal expenses (Office)
Depreciation of office building loo
Bank charges
500
Rent and rates (Omce) 7,600

Cost of production (3) 1,13,300

Add : Selling and Distribution Overhead:
 Cost of production (3) 1,13,300

Add : Selling and Distribution

Overhead:
300
Rent of warehouse
200
Depreciation of delivery van
100
Bad debts
300
Advertising
1,500
Salesmen salaries
700
Up keep of delivery van
1,500
4,600
Commission on sales
1,17,900
Total Cost of Sales (4)
Profit
82,100
2,00,000
Sales 5000 tones la Rs. 40 per unit
From the following information prepare a cost sheet to
show :
(a)Prime cost; (b) Works cost; (c) Cost of production ; (d)
Cost of sales; and (e) Profit.
` Raw materials purchased 32,250
Carriage on purchases 850
Direct wages 18,450
Factory overhead 2,750
Selling overhead 2,450
Office overhead 1,850
Sales 75,000
Opening stock of finished goods 9,750
Closing stock of finished goods 11,100
SALE OF Scrab 250
Solution: Cost Sheet for the period
PARTICULARS RS RS

...................... ` ` Raw materials 35,250

Add: Carriage on purchases 850 36,100
18,450
Direct wages 54,550
Prime Cost
2,750
Factory overhead 57,300
250
Less : Sale of factory scrap 57,050
(b) Works Cost
Office overhead 1,850
58,900
(c) Cost of Production
9,750
Add : Opening stock of finished goods 68,650
Less : Closing stock of finished goods 11,100
Cost of Goods Sold 57,550
Selling overhead 2,450
(d) Cost of Sales 60,000
(e) Profit 15,000
Sales 75,000