COST UNIT :
A unit of quantity of a product,
service or time in relation to which
costs may be ascertained or
expressed.
Steel Roll Press Shop Weld Shop Paint Shop Finished Body
Roll is cut and Sheets are welded The body is dipped
pressed into together to make the into chemicals and
sheets of body depending on paint after which it is
suitable shape the vehicle to be polished and dried.
produced
Other Components
Solution
Statement showing factory cost Rs.
Direct Material:Material Consumed 80000
Direct Labour:Productive wages 22000
Direct Expenses 5000
Prime Cost 107000
Factory overheads 12000
Factory Cost(Gross) 119000
Add:Work in progress:opening stock 13000
132000
Less:Work in progress:closing stock 7000
Works or Factory cost(net) 125000
COST SHEET-ILLUSTRATION 4
Solution
Cost of Goods sold Rs.
Total cost of production 122000
Add:Opening stock of finished goods 12000
Less:Closing stock of finished goods 16000
Cost of Goods sold 118000
COST OF SALES
A. Materials Consumed
Purchases
Add:Opening stock of Raw Material
:Expenses on Purchases
Less:Closing stock of Raw Material
Direct Material Consumed
B. Direct Labour (Wages)
C. Direct Expenses
D. Prime Cost(A+B+C)
E. Factory/Works Overheads
Add:Opening Stock of Work in Progress
Less:Closing Stock of Work in Progress
F. Works/Factory Cost(D+E)
G. Office and administration overheads
H. Total Cost of Production(F+G)
Add:Opening Stock of finished goods
Cost of goods available for sale
Less:Closing Stock of finished goods
I. Production Cost of goods sold
J. Selling and distribution overheads
K. Cost of sales(I+J)
L. Profit
M. Sales(K+L)
COST SHEET-ILLUSTRATION 8