COST SHEET

FORMAT
PARTICULARS ₹ Total Per unit
(₹) (₹)
Opening Stock of Raw Material *** ***
Add : Purchase of Raw Materials *** ***
Add : Purchase Expenses *** ***
Less : Closing Stock of Raw Material *** ***
Raw Materials Consumed *** ***
Direct Wages (Labour) *** ***
Direct Expenses (Charges) *** ***
PRIME COST ***
Factory Overheads ***
Factory Rent *** ***
Factory Power *** ***
Indirect Material *** ***
Indirect Wages *** ***
Supervisors Salary *** ***
Drawing Office Salary *** ***
Factory Insurance *** ***
Factory Asset Depreciation *** ***
Works Cost Incurred *** ***
Add : Opening Stock of WIP ***
Less : Closing Stock of WIP
WORKS COST ***
Administration Overhead ***
Office Rent *** ***
Asset Depreciation *** ***
General Charges *** ***
Audit Fees *** ***
Bank Charges *** ***
Counting House Salary *** ***
Other Office Expenses *** ***
COST OF PRODUCTION ***
Add : Opening Stock of Finished Goods ***
Less : Closing Stock of Finished Goods *** ***
COST OF GOODS SOLD
Selling and Distribution Overhead ***
Salesman Commission *** ***
Salesman Salary *** ***
Travelling Expenses *** ***
Advertisement *** ***
Delivery man expenses *** ***
Sales Tax *** ***
Bad Debts *** ***
COST OF SALES *** ***
PROFIT (BALANCING FIGURE) *** ***
SALES ***

NOTES :
 Factory Overheads are recovered as a percentage of direct wages
 Administration Overhead, Selling and Distribution Overhead are recovered as a percentage of Works
Cost
UNIT COST SHEET

P1. Russel Manufacturing Ltd., asks you to prepare a cost sheet showing unit cost of the product
from the following particulars extracted from its books:
Also fix up the catalogue price, so that after allowing a trade discount of 25%, a profit @331/3% on
sales can be made.
Stock of raw materials in the beginning of the year 32,760
Stock of raw materials at the end of the year 37,820
Purchase of raw materials during the year 1,65,060
Purchase expenses 1,97,820
Wages directly utilised for manufacturing of product : (a) Paid 75,000
(b) Payable 5,000
Patterns and drawing for the product 2,000
Fuel and Power 15,000
Carriage inward (for factory indirect materials) 6,000
Depreciation on factory machinery 10,000
Factory machinery repairs 2,500
Wages of indirect labour (a) Paid 10,000
(b) Payable 600
Indirect material cost 7,500 Rent, rates and taxes (factory) 6,400
Factory Lighting 1,000 Factory Insurance 600
Factory stationery 1,400 Office rent and taxes 3,000
Office Salaries 6,000 Office Lighting 600
Managerial Remuneration 2,800 Office stationery 600
Legal expenses 500 Audit fees 1,000
Deprecation of office furniture 800 Sundry office expenses 700
Salesman’s salary and expenses 5,000 Showroom expenses 3,000
Advertisement expenses 4,000 Packing and forwarding cost 2,000
Carriage Outward 1,500 Bad Debt 1,600
Branch expenses 2,500 Stationery for Selling expenses 600
Units Produced during the year 1,000 units Sundry Distribution expenses 800

P2. From the following particulars of A Ltd. you are required to prepare a cost sheet for the year
ended on 30.03.2020
Particulars ₹ Particulars ₹
Raw Materials as on 1.4.2019 12,500 Administrative Overheads ₹ 2/unit
Work-in-progress as on 1.4.2019 Selling Overheads ₹ 1/unit
- at prime cost 15,000 Distribution Overheads 15,000
add: manufacturing expenses 3,000 18,000 Sale of finished goods (28,000 units) 4,00,000
Finished goods at cost on 1.4.2019 60,000 Raw Materials as on 31.3.2020 20,000
Raw materials purchased 1,10,000 Work-in-progress as on 31.3.2020
Freight on raw materials purchased 5,000 - at prime cost 10,000
Loss of materials by fire 5,000 add: manufacturing expenses 8,000 18,000
Chargeable expenses 25,000 Finished Goods at cost on 31.3.2020 ?
Direct Labour Cost 1,35,000 (10,000 units)
Factory Overheads 70,000 Assume sales are made on FIFO basis

P3. The books and records of A Manufacturing Ltd. present the following data for the month of
August 2020. Direct labour Cost ₹ 16,000 (160% of factory overheads); Cost of goods sold ₹
56,000.
Inventory accounts show the following opening and closing balances:

Particulars August 1 (₹) August 31 (₹)

Raw Materials 8,000 8,600
Work-in-progress 8,000 12,000
Finished Goods 14,000 18,000
Other data: Selling overheads ₹ 3,400; Administration Overheads ₹ 2,600; Sales for the month ₹
75,000. You are required to prepare a statement showing cost of goods manufactured and sold and
profit.

P4. The following particulars relate to special paper manufactured by Bharat Paper Mills in
December 2020. Work out in a Cost Sheet form the Unit Cost of Sales and profit per ton:
Direct Material
Paper pulp 100 tons @ ₹ 250 per ton.
Other materials 20 tons @ ₹ 200 per ton
Direct Labour
80 skilled workers @ ₹ 3 per day for 30 days.
40 unskilled workers @ ₹ 1 per day for 30 days.
Direct Expenses
Special Equipment ₹ 3,000
Special dyes ₹ 1,000
Works Overhead: 60% of Direct wages.
Administrative Overheads: 10% of Works Cost
Selling and Distribution Overheads: 20% of Works Cost.
80 ton of special paper was manufactured and ₹ 1,000 was realised from the sale of waste material
during the course of manufacture. Profit was to be kept @ 20% on Sales.

P5. Reflex Shoe Co. manufactures two types of shoes A and B. Production costs for the year ended
on 31st March 2020 were:
Direct Material cost 15,00,000
Direct Wages 8,40,000
Production Overhead 3,60,000
There was no work-in-progress at the beginning or the end of the year. It is ascertained that:
a) Direct Material in type- A shoes consist twice as much as that in type- B shoes.
b) Direct wages for type- B shoes were 60% of those for type- A shoes.
c) Production overhead was the same per pair for A and B type.
d) Administration overhead for each type was150% of direct wages.
e) Selling cost was ₹ 1.50 per pair.
f) Production during the year was : Type- A : 40,000 pairs of which 36,000 pairs were sold.
Type- B : 1,20,000 pairs of which 1,00,000 pairs were sold.
 g) Selling price per pair was ₹ 44 for type-A and ₹ 28 for type-B shoes.
Prepare a statement showing cost and profit.

P6. A factory’s normal capacity is 1,20,000 units per annum. The estimated cost of production are as
under.
Direct Material : ₹ 3 per unit.
Direct Labour : ₹ 2 per unit (subject to a maximum of ₹ 12000 per month)
Indirect Expenses : Fixed - ₹ 1,60,000 per annum; Variable - ₹ 2 per unit;
Semi-Variable - ₹ 60,000 per annum up to 50% capacity and an extra ₹
20,000 for every 20% increase in capacity or part thereof.
Each unit of raw material yields scrap which is sold at 20 paise. In this year the factory worked at
10% capacity for the first 3 months but it was expected to work at 80% capacity for the remaining 9
months. During the first 3 months the selling price per unit was ₹ 12. What should be the per unit
selling price in the remaining 9 months to earn a total profit of ₹ 2,18,000.

P7. The following particulars are available for the previous year’s production of fans for East
engineering Co.:
(i) Total Production – 1000 units; (i) Cost of raw materials consumed – ₹ 12000; (iii) Cost of Direct
labour – ₹ 20000; (iv) Total works overhead – ₹ 40000; (v) Total office overhead – ₹ 36000; (vi)
Total selling and Distribution overhead – ₹ 16000; (viii) Total Sales value for 800 units – ₹ 112640.
On the basis of the under noted instructions, prepare a detailed price quotation per unit of fan for the
current year :
a) Cost of raw materials and direct labour are to increase by 10% and 15% respectively over the
previous year’s level.
b) Works overhead, Office overhead as well as Selling and Distribution overhead are to be charged
at the same respective percentages as in the previous year.
c) Profit is estimated at the same percentage on total cost as in earned in the previous year.

P8. The cost structure of an article, the selling price of which is ₹. 500, is as follows:
Direct material 50% of total cost
Direct labour 30% of total cost
Overhead balance amount
Due to anticipated increase in existing material price by 20% and existing labour rate by 10%, the
existing profit would come down by 30%, if the selling price remains unchanged.
Prepare a comparative statement showing cost, profit and sale price under the present conditions and
with the increase expected for future, assuming the same percentage of profit on cost as at present
had to be earned.

JOB COST SHEET

P9. The accounts of Longshort Co. Ltd. Show the following for 2010.
Materials used ₹ 1,80,000
Manual and Machine labour wages directly chargeable ₹ 1,60,000
Works overhead ₹ 40,000
Established and general expenses ₹ 19,000

(a) Show the works cost and total cost, the percentage that the works cost bears to the manual and
machine labour wages, and the percentage that the establishment and general expenses bear to
the works cost.
(b) What price should the company quote to manufacture a machine which, it is estimated will
require an expenditure of ₹ 8,000 on materials and ₹. 6,000 on wages, so that it will yield a
profit of 20% on selling price.

P10. The information given below has been taken from the cost records of an Engineering Works in
respect of Job No. 1303 :

Direct Material cost ₹ 4,010

Direct Wages: Department : A – 60 hours @ ₹ 3 per hour
B – 40 hours @ ₹ 2 per hour
C – 20 hours @ ₹ 5 per hour
Overhead expenses for these three departments were estimated as follows :
Variable overheads : Department : A – ₹ 5,000 for 5,000 labour hours
B – ₹ 3,000 for 1,500 labour hours
C – ₹ 2,000 for 500 labour hours
Fixed Overheads : Estimated at ₹ 20,000 for 10,000 normal working hours
You are required to calculate the total cost of job number 1303 and calculate the price to earn a profit
of 25% on Selling Price.

P11. A company is manufacturing building bricks and fire bricks. Both the products require two
processes Brick-forming and Heat treatment.
Time requirement for the two bricks are : Building Bricks Fire Bricks
Forming per 1,000 bricks 3 hours 2 hours
Heat treatment per 1,000 bricks 2 hours 5 hours
Total cost of the two departments in one month were :
Brick forming ₹ 21,200
Heat treatment ₹ 48,800
Production during the month was :
Building bricks 1,30,000 numbers
Fire bricks 70,000 numbers
Prepare a Statement of manufacturing cost for the two varieties of bricks.

P12. A jobbing factory has undertaken to supply 200 pieces of a component per month for the
ensuing six months. Every month a job order is opened against which materials and labour hours are
booked at actuals. Overheads are levied at a rate per labour hour. The selling price contracted for ₹ 8
per piece.
From the following data, present the cost and profit per piece of each job order and the overall
position of the order for 1,200 pieces.
Month Job Output Material Cost Direct Wages Direct labour
hours
January 210 650 120 240
February 200 640 140 280
March 220 680 150 280
April 180 630 140 270
May 200 700 150 300
June 220 720 160 320

The other details are :

Month Chargeable expenses Direct labour

hours
January 12,000 4,800
February 10,560 4,400
March 12,000 5,000
April 10,580 4,600
May 13,000 5,000
June 12,000 4,800

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