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Class Question Cost Sheet

The document provides financial information for Campbell Company, a metal and woodcutting manufacturer, for the year 2011. It includes details of direct materials, direct labor, manufacturing overhead costs, inventory amounts, revenues, and other expenses. The questions ask to: 1) Classify the costs as direct/indirect and variable/fixed. Direct material cost per unit is Rs. 50 and plant leasing cost per unit is Rs. 6. 2) If 900,000 units were produced, direct material cost is Rs. 50 crore and plant leasing cost is Rs. 5.4 crore. 3) If production increases to 1,000,000 units, direct material cost is Rs. 50 crore

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Rachit Srivastava
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197 views

Class Question Cost Sheet

The document provides financial information for Campbell Company, a metal and woodcutting manufacturer, for the year 2011. It includes details of direct materials, direct labor, manufacturing overhead costs, inventory amounts, revenues, and other expenses. The questions ask to: 1) Classify the costs as direct/indirect and variable/fixed. Direct material cost per unit is Rs. 50 and plant leasing cost per unit is Rs. 6. 2) If 900,000 units were produced, direct material cost is Rs. 50 crore and plant leasing cost is Rs. 5.4 crore. 3) If production increases to 1,000,000 units, direct material cost is Rs. 50 crore

Uploaded by

Rachit Srivastava
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Management Accounting

COST SHEET
Campbell Company is a metal and woodcutting manufacture, selling
products to the home construction market. Consider the following data for
2011:
Particulars Amount (RS)
Sandpaper 20,000
Materials Handling costs 7,00,000
Lubricants & Coolants 50,000
Miscellaneous indirect manufacturing labour 4,00,000
Direct manufacturing Labour 30,00,000
Direct materials inventory Jan 1, 2011 4,00,000
Direct materials inventory Dec 31, 2011 5,00,000
Finished Goods Inventory Jan 1 2011 10,00,000
Finished Goods Inventory Dec 31 2011 15,00,000
Work in Process Inventory Jan 1, 2011 1,00,000
Work in Process Inventory Dec 31, 2011 1,40,000
Plant- Leasing Costs 5,40,000
Depreciation- Plant equipment 3,60,000
Property Tax on - Plant equipment 40,000
Fire Insurance on - Plant equipment 30,000
Direct Materials Purchased 46,00,000
Revenues 1,36,00,000
Marketing Promotions 600,000
Marketing salaries 10,00,000
Distribution Costs 7,00,000
Customer service costs 10,00,000

1. Prepare a schedule of cost sheet. For all manufacturing items,


classify as direct costs or indirect costs and indicate by V or F
whether each is basically a Variable or Fixed cost (when the cost
object is a product unit). If in doubt, decide on the basis of whether
the total cost will change substantially over a wide range of units
produced.
2. Suppose that both the direct material costs and the plant-leasing
costs are for the production of 900,000 units. What is the direct
material cost of each unit produced? What is the plant leasing cost
per unit? Assume that the plant leasing cost is a fixed cost.
3. Suppose Campbell company manufactures1,000,000 units next
year. Repeat the computation in requirement 2 for direct materials
and plant leasing costs. Assume the implied cost-behaviour patterns
persists.
Q2) The following details have been obtained from the cost records of BPL
company:

Prepare a statement account giving various elements and also profit and
loss.

Particulars Beg of CY End of CY


1) Direct materials inventory 22000 26000
2) WIP inventory 21000 20000
3) Finished Goods inventory 18000 23000
4) Purchase of direct materials 75000
5) Direct manufacturing labor 25000
6) Indirect manufacturing labor 15000
7) Plant insurance 9000
8) Depreciation-plant building and equipment 11000
9) Repairs and maintenance-plant 4000
10) Marketing, distribution and customer 93000
service
11) General and administrative costs 29000
12) Revenues 300,000

Q3) Each of the following cost items pertains to one of these companies.
General Electric (a manufacturing-sector company), Tata industries (a
merchandising – sector company) and Infosys (a service sector company):
1. Perrier mineral water purchased by Tata industries for sale to its
customers.
2. Electricity used to provide lighting for assembly line workers at a
General Electric refrigerator-assembly plant.
3. Depreciation on Infosys computer equipment used to update
directories of Websites.
4. Electricity used to provide lighting for Tata Industries store aisles.
5. Depreciation on General Electric’s computer equipment used for
quality testing of refrigerator components during the assembly
process.
6. Salaries of Tata Industries marketing personnel planning local-
newspaper advertising campaigns.
7. Perrier mineral water purchased by Infosys for consumption by its
software engineers.
8. Salaries of Infosys marketing personnel selling banner advertising.
Classify each of the cost items as an inventoriable cost or a period cost.
Explain your answers.

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