Issues for discussion

Cost Sheet
Cost sheet Vs Income Statement
 Some relevant financial information (April) Cost Sheet
Raw material purchased and used ( 1000 kgs) 250,000 Direct Material 250,000
Plant Purchased ( life =10) 780,000 Direct labour 185,000
Direct Wages 185,000 Direct Expenses 50,000
Direct expenses 50,000 Prime Cost 485,000
Rent for factory building 250,000 Manufacturing OH
Rent for show room 25,000 Rent for factory building 250,000
Salary of admin staff 50,000 Salary of factory manager 200,000
Salary of factory manager 200,000 Plant Insurance 5,000
Salesmen salary 60,000 Electricity for Factory 18,000
Electricity 90,000 Depreciation on plant 6,500
Factory 20% Manufacturing OH 479,500
Admin 50% Product Cost 964,500
Sales office 30% Non Manufacturing OH
Depreciation on office building 25,000 Admin OH
depreciation on sales van 12,000 Salary of admin staff 50,000
Depreciation on vehile used by the admin staff 20,000 Electricity 45,000
Plant insurance 5,000 Depreciation on office building 25,000
Advance paid to the suppliers 150,000 Depreciation on vehicle used by 20,000
Interest on loan (Taken for purchase of building) 10,000 Admin OH 140,000
Income tax of the previous year paid 85,000 SDO
Dividend received 5,800 Salesmen salary 60,000
dividend paid 260,000 Electricity 27,000
Units Produced 2,000 Depriciation on sales van 12,000
Rent for show room 25,000
Examine Cost SDO 124,000
Find cost per unit Total Cost 1,228,500
find price, if the company wants to earn profit of 20% Price
 Some relevant financial information (April) Cost sheet
Raw material purchased and used ( 1000 kgs) 250,000 Direct Mater 250,000
Plant Purchased ( life =10) 780,000 Direct Labou 185,000
Direct Wages 185,000 Direct Expen 50,000
Direct expenses 50,000 Prime Cost 485,000 TC =
Rent for factory building 250,000 Manufacturing OH
Rent for show room 350,000ent for factory building 250,000
Salary of admin staff 250,000ary of factory manager 200,000 TC =
Salary of factory manager 200,000 Plant insurance 5,000
Salesmen salary 250,000 Electricity 9,000
Electricity 90,000 Depreciation (Plant) 6500 TC =
Factory 10% 470,500
Admin 70% Product cost 955,500
Sales office 20% Non manufacturing OH TC =
Depreciation on office building 85,000 Admin overhead
depreciation on sales van 150,000 Salary of admin staff 250,000
Depreciation on vehile used by the admin staff 250,000 Electricity 63,000 TC =
Plant insurance 5,000 tion on office building 85,000
Advance paid to the suppliers 150,000used by the admin staff 250,000
Interest on loan (Taken for purchase of building) 10,000 648,000
Income tax of the previous year paid 85,000 Sales and Distribuition overheads
Dividend received 5,800 Rent for show room 350,000
dividend paid 260,000 Salesmen salary 250,000
Units Produced 2,000 Electricity 18,000
depreciation on sales van 150,000
768,000
Total Cost 2,371,500
Find Price if all stock sold
expected profit of 25%

Price (1) #REF!

Price (2) #REF!
Prime Cost/Units Produced
243
TC = Product Cost + AO+ SDO
1,228,500 964,500 140,000 124,000
78.51% 11.40% 10.09%

TC = Prime Cost + MO+ NMO

1,228,500 485,000 479,500 264,000
39.48% 39.03% 21.49%
482

614
737
 DM+ DL+ DE+ Overheads
250,000 185,000 50,000 1,886,500 2,371,500

DM+ DL+ DE+ MO+ NMO

250,000 185,000 50,000 470,500 1,416,000 2,371,500

DM+ DL+ DE+ MO+ AO SDO

250,000 185,000 50,000 470,500 648,000 768,000 2,371,500

Prime Cost+ Overheads

485,000 1,886,500 #REF!

Prime Cost+ MO+ AO+ SDO

485,000 470,500 648,000 768,000 2,371,500
20% 20% 27% 32%
Product Cost NMO
40% 60%
 Cost information (Quarter -1) CS
Raw material purchased and used Cost of material consumed
Opening stock (Kgs) @24 1,000 opening
Purchase (kgs)@25 8,000 pur
Closing stock (kgs) 2,000 less closing stock(FIFO method)
Direct expenses (handling material) 25,000
Direct Wages 185,000
Purchased Plant on credit 2,000
Exchange rate: $1 = Rs. 83
Depreciation method: SLM 25%
Rent for factory building not paid 450,000
Rent for admin building paid 300,000
Rent for show room not paid 180,000
Salary of admin staff 150,000
Salary of factory manager 200,000
Salesmen salary 60,000
Finished product
Opening stock (Units) 500
Production (units) 2,500
closing stock (units) 800

Find Price if all stock sold

expected profit of 25%

Price (1)
Price (2)
 Cost information_April
Raw material purchased and used 250,000
Plant Purchased ( life =10) 420,000
Direct Wages 185,000

Rent for factory building 50,000

Rent for admin building 250,000
Rent for show room 25,000
Salary of admin staff 220,000
Salary of factory manager 80,000
Salesmen salary 60,000
Units Produced 2,000

Dep 3,500

688,500 688,500
 Cost information_April
Raw material purchased and used 250,000
Plant Purchased ( life =10) 420,000
Direct Wages 185,000

Rent for factory building 50,000

Rent for admin building 50,000
Rent for show room 225,000
Salary of admin staff 20,000
Salary of factory manager 80,000
Salesmen salary 260,000
Units Produced 2,000

Dep 3,500
688,500 688,500
 CS
material consumed
24000
200000
50000
174000
 Some relevant business Transactions (year) of A ltd Income Statement Cost sheet
Started Business with cash 500,000 Income DM
Availed 10% Loan 250,000 Sales 2000000 DL
Cost of raw material (RM) purchased and used 375,000 Dividend 20,000 DE
Purchased shares of M ltd 250,000 2,020,000 Prime Cost
Salary paid 275,000 Manufacturing OH
Factory 25% Expenses Salary
Admin 70% COGS 375,000 Rent
Sales 5% Salary 275,000 Depriciation
Rent (due but not paid) 300,000 Rent 300,000
Factory 30% 950,000 Product Cost
Admin 50% PBIDTA 1,070,000 Non Manu OH
Sales 20% Depriciation 125000 Admin OH
Plant purchased on 1st April 500,000 Imparement Loss 28,000 Salary
Depreciation :25% 25% PBIT 917,000 Rent
Impairment loss 28,000 Interest 25,000 SDO
Interest on loan paid fully 25,000 PBT 892,000 Salary
Dividend received 20,000 tax 223000 Rent
Units produced 5,000 PAT 669,000
Sold all units at price 400 Total Cost
Tax 25% Profit

Required
Income statement
Cost sheet
 Cost sheet
375,000 Reasons of Diff
68750 Difference in Profit Int 25,000
0 IS 669,000 Itax 223000
443,750 CS 925000 Impair 28,000
acturing OH Div 20,000
0
90000
125000
215,000 Note:
658,750 Impairment loss
is not included in
cost sheet since
it is financial
192500 concept
150000

13750
60000
416250
1,075,000
925000
 Cost information_April Cost sheet
Raw material purchased and used 250,000 DM 250,000
Plant Purchased ( life =10) 420,000 DL 185,000
Direct Wages 185,000 DE 0
Rent for factory building 250,000 Prime Cost 435,000
Rent for admin building 100,000 Manufacturing OH
Rent for show room 25,000 Salary 200,000
Salary of admin staff 50,000 Rent 250,000
Salary of factory manager 200,000 Depriciation 3,500
Salesmen salary 60,000 453,500
Units Produced 2,000 Product cost 888,500
Depreciation 3,500 Non manufacturing OH
Examine cost Admin overhead
Salary 50,000
Rent 100,000
Sales overheads
Salary 60,000
Rent 25,000
235,000
Total Cost 1,123,500
 Cost information_April TC
Raw material purchased and used 250,000 MC 250,000
Plant Purchased ( life =10) 420,000 LC 185,000
Direct Wages 185,000 Expenses 688,500
1,123,500
Rent for factory building 50,000
Rent for admin building 250,000 Cost Sheet
Rent for show room 25,000 DM 250,000
Salary of admin staff 220,000 DL 185,000
Salary of factory manager 80,000 DE 0
Salesmen salary 60,000 Prime Cost 435,000
Units Produced 2,000 Add MO
Rent for factory building 50,000
Dep 3,500 Salary of factory manager 80,000
Dep 3,500
133,500
688,500 688,500 Cost of manufacturing 568,500
Add A &SD OV
Rent for admin building 250,000
Salary of admin staff 220,000
Rent for show room 25,000
Salesmen salary 60,000
555,000
Total Cost 1,123,500
 Cost information_April TC
Raw material purchased and used 250,000 MC 250,000
Plant Purchased ( life =10) 420,000 LC 185,000
Direct Wages 185,000 Expenses 688,500
1,123,500
Rent for factory building 50,000
Rent for admin building 50,000 Cost Sheet
Rent for show room 225,000 DM 250,000
Salary of admin staff 20,000 DL 185,000
Salary of factory manager 80,000 DE 0
Salesmen salary 260,000 Prime Cost 435,000
Units Produced 2,000 Add MO
Rent for factory building 50,000
Dep 3,500 Salary of factory manager 80,000
Dep 3,500
 133,500
688,500 688,500 Cost of manufacturing 568,500
Add A &SD OV
Rent for admin building 50,000
Salary of admin staff 20,000
Rent for show room 225,000
Salesmen salary 260,000
555,000
Total Cost 1,123,500
22%
16%
61%

39%

12%

49%
22%
16%
61%

39%
12%

49%
 Information for the January
Raw material Purchased 200,000
Plant Purchased ( life =5) 420,000
Transport cost on Plant
for Plant 30,000
for raw material 15,000
Direct Wages 85,000
Royalty for using know-how 60,000
Rent for factory building 30,000
Rent for admin building 50,000
Rent for show room 55,000
Salary of admin staff 120,000
Salary of factory manager 40,000
Salesmen salary 60,000
Units Produced 2,000
Purchased shares of Tata steel 25,000

Find cost
 Business Transactions Income Statement
Started Business with cash 500,000
Availed 10% Loan 250,000
Cost of raw material (RM) purchased and used 375,000
cost of cleaning of material _ not paid 25,000
Charges for using knowhow for processing the RM 125,000

Salary paid 275,000

Factory 25%
Admin 70%
Sales 5%
Rent (due but not paid) 300,000
Factory 30%
Admin 50%
Sales 20%
Electricity (paid) 275,000
Factory 25%
Admin 65%
Sales 10%
Interest due but not paid
Units produced 5,000
Sold all units at price 400
Tax 25%

Required
Income statement
Cost sheet
Cost sheet
 Business Transactions
Started Business with cash 200,000
Availed 10% Loan 500,000

Purchased RM 200,000
Purchased Shares of X ltd 50,000
Rent 25,000
Factory 60%
Admin 40%
Salary 80,000
Factory 30%
Admin 50%
Sales 20%

Electricity 26,000
Factory 50%
Admin 20%
Sales 30%
Transport 18,000
Purchase Related 10%
Sales Related 90%
Interest paid
Dividend Recived from X 15,000
Units produced 2,000
Sold all units at price 400
 Started business with cash of Rs. 100,000
Availed 10% loan: 300,000 and used the money to purchas plant
(life: 10 years)
Purchased raw material : 50000 units @ 5 on credit
Wages: 10,000 per month
Office Rent for month: 10000
Factory rent: 15000 per month
Factory manager salary: 18000 per month
Office manager’s salary: 20000 per month
Sales manager’s salary: 25000 per month
Production the first month: 10 000 units and entire stock sold @
100 for cash
Purchased shares for Rs. 20,000 and sold at the end of the month
for 21500

Required: Cost Sheet