COST SHEET

1.The following particulars are extracted from the books of a company relating to
commodity Alpha for the half-year ending 30th June 2009.
Purchase of raw materials Rs.1, 30,000
Direct wages 1,00,000
Rent, rates, insurance and works on cost 45,000
Carriage inwards 1,500
Stock on 1-1-2009
Raw materials 20,000
Finished products (1,600 tonnes) 17,600
Stock on 30-6-2009
Raw materials 25,000
Finished products (3,200 tonnes) 37,600
Work-in-progress on 1-1-2009 4,500
Work-in-progress on 30-6-2009 16,000
Factory supervision 10,000
Sales – Finished products 3,00,000
Advertising discount allowed and selling cost at Re.0.50 per tonne sold.
25,000 tonnes of commodity was sold during the period.
You are required to ascertain:
i. Prime Cost
ii. Factory Cost
iii. Cost of Sales
iv. Profit
v. No. of tonnes of the commodity sold.

Solution
Cost Sheet of Commodity Alpha for the Period Ending 30-6-2009
Particulars Rs. Rs.
Rs.
Raw materials:
Opening stock 20,000
Add: Purchases 1,30,000
1,50,000
Less: Closing stock 25,000
1,25,000
Add: Carriage inwards 1,500
Material consumed 1,26,500
Direct wages 1,00,000
Prime cost 2,26,500
Rent, rates, insurance and works on cost 45,000
Factory supervision 10,000 55,000
Gross Factory Cost 281500
Add: Opening Work-in-progress 4,500
2,86,000
Less: Closing Work-in-progress 16,000
Net Factory Cost 2,70,000
Opening stock of finished goods (1,600 tonnes) 17,600
2,87,600
Less: Closing stock of finished goods (3,200 tonnes) 37,600
Cost of goods sold 2,50,000
Add: Advertising and selling cost @ Re.0.50 per tonnes
on 25,000 tonnes
12,500
Cost of sales 2,62,500
Profit 37,500
Sales 3,00,000

2. The following information has been obtained from the records of ABC LTD. from 1st January’ 13 to 30 June’
13.

1st Jan’ 2019 30th June’2019

Cost of raw material 60,000 50,000

Cost of work-in-progress 24,000 30,000

Cost of finished goods 1,20,000 1,10,000

Purchase of raw material 9,00,000

Direct wages 4,60,000

Factory overhead 1,84,000

Adm. Overhead 60,000

Selling & Distribution overhead 40,000

Sales 18,00,000

Calculate material consumed, Factory Cost & Total cost.

Answer:

Cost Sheet for the period from 1st Jan ’19 to 30th June ’19

Op. Stock of Raw materials 60,000

Add: Purchase of Raw materials 9,00,000

9,60,000

Less: Closing stock of Raw materials 50,000

Raw Materials Consumed 9,10,000

Add: Direct wages 4,60,000

Prime Cost 13,70,000

Add: Factory Overhead 1,84,000

Gross Factory Cost 15,54,000

Add: Opening Work in Progress 24,000

15,78,000

Less: Closing Work in Progress 30,000

Net Factory Cost/Cost of goods manufactured 15,48,000

Add: Administrative Overhead 60,000

Cost of goods sold 16,08,000

Add: Opening stock of Finished goods 1,20,000

17,28,000

Less: Closing stock of Finished goods 1,10,000

Cost of production 16,18,000

Add: Selling and Distribution Overhead 40,000

Cost of sales (Total Cost) 16,58,000

Profit (Balancing figure) 1,42,000

Sales 18,00,000