In the books of a Company

Cost Sheet for the period ended..

Units Produced..
Name of the product
Particulars
Opening stock raw materials
Add Purchases of Raw Materials
Add: Expenses on Purchases of Raw
Materials (octroi & duty)
Less: Closing stock of raw materials
Less: Sale of scrap or defectives of raw
materials
=
Cost of materials consumed
Add: Productive Labour
Add: Outstanding wages
Add: Direct Expenses( architects fees)
=
Prime cost
Add: Factory overheads
Add: Opening stock of Work-in-progress
Less: Closing stock of Work-in-progress
Less: Sale of scrap or defectives of Workin-progress
=
Factory cost
Add: Office overheads
=
Cost of Production
Add: Opening Stock of Finished Goods
Less:
=
Add:
=
Add
Less
=

Closing Stock of Finished Stock

Cost of Goods Sold
Selling & Distribution Overheads
Total cost
Profit
Loss
Sales

unit sold.
Total cost
Rs.

Unit
Cost
Rs.

Statement showing distribution of overheads

Particulars
Factory
Office

Selling &
distribution

Non cost items

ie. Items to be excluded from cost.
1. Financial Incomes:
Capital profits, dividend received, brokerage &
commission received, share transfer fees, interest on
investments, rent received , bad debts recovery, interest
on loan given.
2. Financial charges
capital losses, cash discount , trade discount, penalties &
fines, share transfer fees paid, interest on debentures,
preliminary expenses, underwriting commission,
discount on issue of shares and debentures, loss on
investment, capital expenses, interest on capital, salary
or commission paid to partner, income tax, wealth tax,
interest on debentures, reconstruction expenses,
development expenses.
3. Appropriations:
Bad debts reserve, dividends paid, charitable donations,
transfer to reserve, sinking fund, debenture redumption
fund, machinery replacement fund, investment
fluctuation fund.
4. Abnormals:
Abnormal wastage, abnormal idle time, loss by fire, loss
by theft, loss of stock, insurance premium.

Q. 1) The cost accounts of A Ltd. Mumbai, for the year ended

31st March 2009 showed the following information.
Types of stock
As on 1-4-2008
As on 31-3-2009
Raw materials
75,000
86,000
Work-in-progress
1,20,000
75,000
Finished stock
44,000
21,000
Underwriting commission
12,000
Purchase of raw material
1,58,000
Selling overheads
23,000
Drawing Office salaries
5,600
Productive Labour
36,700
Audit fees
13,900
Establishment on cost
36,000
Steam, gas and water
4,300
Sales
6,78,800
Rent
24,000
(factory 80%, office 20%)
Architects fees
12,700
Wages outstanding
54,000
Octroi and duty
3,000
Distribution on cost
12,800
Solution:
In the books of a Company
Cost Sheet for the period ended..
Units Produced..
Name of the product
Particulars
Opening stock raw materials
Add Purchases of Raw Materials
Add: Expenses on Purchases of Raw
Materials (octroi & duty)
Less: Closing stock of raw materials
Less: Sale of scrap or defectives of raw
materials
=
Cost of materials consumed

unit sold.
Total cost Unit
Rs. Cost
Rs.
75,000
1,58,000
3,000
86,000
0
1,50,000

Add:
Add:
Add:
=
Add:
Add:

Productive Labour
Outstanding wages
Direct Expenses( architects fees)
Prime cost
Factory overheads
Opening stock of Work-in-progress

36,700
54,000
12,700
2,53,400
29,100
1,20,000

Less: Closing stock of Work-in-progress

Less: Sale of scrap or defectives of Workin-progress
=
Factory cost
Add: Office overheads
=
Cost of Production
Add: Opening Stock of Finished Goods

75,000

Less:
=
Add:
=
Add
Less
=

Closing Stock of Finished Stock

Cost of Goods Sold
Selling & Distribution Overheads
Total cost
Profit
Loss
Sales

3,27,500
54,700
3,82,200
44,000
21,000
4,05,200
35,800
4,41,000
2,37,800
6,78,800

Statement showing distribution of overheads

Particulars
Factory
Office
Selling &
Overheads Overheads distribution
Overheads
Selling overheads
23,000
Drawing office salaries
5,600
Audit fees
13,900
Establishment on cost
36,000
Steam ,gas and water
4,300
Rent
19,200
4,800
Distribution on cost
12,800
Total
29,100
54,700
35,800

Problems
Q.2) The expenditure incurred in the manufacturing and
selling of product A for the three months ended 31st march
2008 is given as below:
Rs.
Direct material cost
30,000
Engineers fees
1,000
Power & fuel
7,000
Wages payable
2,000
Office salary
5,000
Trade discount
500
Direct expenses
4,000
Haulage
3,000
General on cost
1,000
Catalogue expenses
1,500
Process & operating wages
13,000
Time-keeping expenses
2,000
Electricity charges
2,000
Donations
1,000
Tendering expenses
1,000
Commission on sales
2,500
Tons manufactured & sold
900
Prepare cost sheet of XYZ Ltd., Pune, showing the cost of each
element, the total cost per ton and the profits if selling price is
Rs. 120 per ton.
Q. 3) From the following particulars relating to M/S Shah
Brothers, prepare a simple cost sheet showing,
a. prime cost
b. works cost
c. cost of production
d. cost of sales
e. profit or loss for the period for six months ended
31.3.2009
Rs.
Cost of materials consumed
2,30,000
Oil and waste
3,000
Operating labour
32,000
Wages of foreman
44,500
Direct expenses
3,900

Stock keeper wages

Sales cash and credit
Commission to partner
Electric power
Salary to partner
Consumable stores
Direct wages payable
Lighting
i)Factory plant
ii) office establishment
Carriage outward
Rent
i)factory plant
ii) machinery
iii) office premises
iv) warehouse
Interest on bank overdraft
Advertising
Depreciation
i) office building
ii) machinery
Traveling expenses
Office managers salary
Salesmans commission
Directors fees
Printing & stationery
Telephone charges
Postage
Bad debts

40,000
100
9,000
1,000
2,000
500
1,00,000
200
650
1,000
1,000
2,000
3,000
4,000
5,500
3,450
2,000
4,280
6,000
12,000
22,000
40,000
5,200
6,500
3,320
2,900

Q. 4) from the following particulars of Maharasttra

prepare a cost sheet for the year 2008-2009
Sale of scrap of raw material
Works overheads
Stock of raw materials as on 1-4-2008
Selling and distribution expenses
Wages due but not paid
Costom duty on purchases
Share transfer fees paid

Traders,
500
45,000
40,000
71,500
4,500
5,500
1,500

Purchases of raw materials

1,50,000
Office on cost
32,500
Share transfer fees received
2,500
Stock of raw materials as on 31-3-2009
15,000
Direct wages
95,500
The company has to send a tender for the manufacture of a
machine in the year 2009-10. As per the judgment of costing
department materials of Rs. 80,000 will be required and wages
will be Rs. 50,000. The factory expenses bears the same
percentage on direct wages, office expenses bears the same
percentage on works cost and selling & distribution expenses
bear the same percentage on the cost of production as that of
the year 2008-09. The tender is to be made at a profit of 25 %
on market price.
Q. 5) Prepare a cost sheet with the help of the following
information. Give statement of cost and profit valuing closing
stock on the basis of LIFO, FIFO AND Weighted average cost
separately.
Opening stock:
Show room expenses 40,000
Selling commission
Raw materials: 10,000
@ 5 % on sales
Work in
30,000
Other selling
progress:
expenses
15,000
Finished goods: 80,000
Office & Admn.
(1000 units)
Overheads
60,000
Purchase of raw
1,00,000 Sales ( 12,000 units)
material
3,00,000 Closing Stock:
Direct labour
20,000
Raw materials: 15,000
Direct power
6,000
Work in
Indirect power
24,000
18,000
progress:
Indirect material
30,000
Other factory
Finished goods:
expenses
(4000 units )
Selling price Rs. 100 per unit.
Q. 6) The books & records of AB manufacturing company,
present the following data for the month of January 2009:
Direct Labour cost : Rs. 16,000 (160 % of factory overheads)
Cost of Goods sold : Rs. 56,000

Inventory accounts showed these opening and closing

balances:
January 1
January 31
Raw materials
Rs. 8,000
Rs. 8,600
Work-in-progress
8,000
12,000
Finished goods
14,000
18,000
Other data: selling Expenses Rs. 3,400; General Expenses
Rs.2,600; Sales for the month Rs. 75,000. You are required to
prepare a statement showing cost of goods manufactured and
sold and profit earned.
Q. 7) The following data pertains to Mr. Y for the month of
March 2009:
Rs.
Rs.
Direct material used
847 Manufacturing
Opening finished
? overhead
?
goods stock
Cost of goods
Closing finished stock
94 manufactured
1,878
Direct manufacturing
Cost of goods sold
?
labour
389 Cost of goods
available for sale
1,949
Find out the missing items and the statement of cost for
March 2009.
Q. 8) Raw materials X costing Rs. 100 per KG and Y costing
Rs. 60 per KG are mixed in equal proportions for making
product A. The loss of materials in processing works out to 25
% of the output. The production expenses are allocated at 50
% of direct material cost. The end product is priced with a
margin of 33 % over the total cost. Material Y is not easily
available and substitute material Z has been found for y
costing Rs. 50 per KG. It is required to keep the proportion of
this substitute material in the mixture as low as possible and
the same time maintain the selling price of the end product at
existing levels and ensure the same quantum of profit as at
present.
Q.9) The following details are available from the books of Ram
products Ltd. for the year ending 31st March 2007:

Direct wages

6,00,000 Printing &

12,000
stationery
Purchase of
7,20,000 Counting house
12,000
materials
salary
Other materials
36,000 Carriage outwards
8,640
Wages of foremen
48,000 Other indirect
6,000
and stores keeper
wages
Cost of research
30,000 Office managers
72,000
and experiments
salary
Power fuel and
54,000 Drawing office
36,000
haulage
salary
Closing stock of Opening stock of Raw materials
1,33,440 Raw materials
1,20,000
Work in progress
96,000 Work in progress
28,800
Finished goods
1,95,000 Finished goods
97,500
( 12,000 units)
(6,000 units)
Sales
18,00,000 Income tax
22,000
Donations
5,000
Selling and distribution expenses are to be charged at Re. 1
per unit sold. During this year total units produced were
96,000. Prepare a cost sheet showing different elements of cost
and the profit.
Q. 10) The following are the details of 14 H.P. motor cars
produced by Zen & Co Ltd. for the year ending 31st March
2007:
Opening stock of Raw materials
Rs.
50,000
Works overheads
Rs. 1, 96,000
Purchases
Rs. 12, 00,000
Establishment charges
Rs 1, 49,170
Carriage
Rs. 60,000
Wages
Rs. 7, 00,000
Closing stock of Raw materials
Rs.
75,000
1. Find out the works cost & the total cost of motor cars,
percentage the works overheads bears to wages and
percentage that establishment charges bears to works
cost.
2. Work out what price a co should quote for a motor car,
which is estimated will require on expenditure of

Rs.5,500 in raw material and Rs. 4,000 in wages, so that

it would yield a profit of 25% on quotation price.