Rajarshi Shahu Mahavidyalaya, Latur (Autonomous)

Department Of Commerce
Cost Accounting I
B.Com II (Sem III)
By Miss. S. N. Bagwan
M.Com, NET, SET.

II. Output Costing

❖ Meaning of Unit Costing

Unit costing is similar to ‘Process Costing.’

This method is used when an organisation produces only one product or only few
grades of similar articles.

This method is called ‘Unit Costing’ because every unit of production is identical in
all respects.

This method is also known as Output Costing or Single Costing.

This method is also called as Single Costing because the process of production
comprises only one stage or a single operation.

It is also called Output Costing because it is the method adopted by concern

producing a single article on a large scale.

The output being a mass-produced, each unit of output is indistinguishable from the
other.

❖ Examples
Following are the examples of industries where unit costing is used-
✓ Collieries,
✓ Mining Concerns,
✓ Brick Works,
✓ Slate Works,
✓ Breweries,
✓ Steel Works,
✓ Cement Industry,
✓ Television Manufacturing Concerns,
✓ Radio Manufacturing Concerns, and
✓ Camera Manufacturing Concerns, etc.
 ❖ Definition of Unit Costing
1. J R Batliboi
“Single or output cost system is used in businesses where a standard product is turned
out and it is desired to find out the cost of a basic unit of production.”

❖ Characteristics of Unit Costing

1. The Per Unit Cost is determined under this Method.

2. Cost Comparison is possible.

3. Equality of Cost.

4. Production is on large scale basis.

5. Units of production are homogenous.

6. Cost Units are expressed in convenient Unit of Measurement.

❖ Cost Sheet

It is also known as Statement of Cost, Production Statement, Cost Statement,

Statement of Cost and Profit.

A Cost Sheet is an Operating Statement.

“Cost sheet is statement of cost showing in detail the various elements of cost in a
manufacture of a product.”

It has been defined by CIMA, London as, “ a document which provides for the
Assembly of detailed cost of a cost Centre or cost unit.”

Cost sheet is prepared weekly, monthly, yearly, or for any period.

It shows not only the cost per unit of every cost element but in total cost also.

❖ A Specimen of Cost Sheet

Cost Sheet
For the Period .....
Production ..... Units
Particulars Amount (in Amount (in
Rs.) Rs.)
Direct Material xxx
Direct Labour or Wages/Productive Labour or Wages xxx
Direct Expenses/Chargeable Expenses xxx
+
-------------
→
A. Prime Cost xxx
Factory Overheads
Indirect Material
Indirect Wages or Labour/ Unproductive Wages or Labour
Leave Wages
Overtime Wages
Fuel and Power
Lubricant Oil
Factory Rent and Taxes
Factory Insurance
Factory Lighting
Factory Supervision/Supervisors Salary
Works Stationary
Factory Canteen and Welfare Expenses
Repair of Machinery
Salary of Works Manager
Depreciation of Plant and Machinery
Works Expenses/Indirect Expenses
Gas and Water
Technical Director’s Fees
Laboratory Expenses
Works Telephone Expenses
Internal Transportation Expenses
Factory Cleaning
Factory Electricity
Depreciation of Factory Building
Coal and coke
Drawing Office Salaries
Oil and Waste
Wages of Foreman
Storekeeper's Wages xxx
Consumable Store +

+
-------------
→
B. Factory Cost/Works Cost xxx
Office and Administrative Overheads
Office Salaries
Director’s Fees
Office Rent and Rates
Office Stationary and Printing
Sundry Office Expenses
Depreciation of Office Furniture
Subscription to Trade Journal or Magazine
Office Lighting
Establishment Charges
Director’s Travelling Expenses
Postage and Telegram
Legal Charges
Audit Fees
Depreciation and Repair of Office Equipment’s
General Expenses
Bank Charges
Office Electricity Charges
Office Cleaning
Depreciation of Office Building xxx
Telephone Charges +

+
-------------
→
C. Cost of Production xxx
Selling and Distribution Overheads
Advertising Expenses
Showroom Expenses
Bad Debts
Salesman's Salary and Expenses
Packing Expenses
Carriage Outward
Commission of Sales Agents
Collection Charges
Cost of Catalogues
Expenses of Delivery Van
Travelling Expenses
Cost of Tenders
Warehouse Expenses
Sales Manager’s Salary
Insurance of Showroom
Sales Director’s Fees
Sales Office Expenses
Rent of Sales Office
Depreciation of Delivery Vans
Expenses of Sales Branch Establishment xxx
Discount Allowed +

+
-------------
→

D. Total Cost xxx

Add: Profit + xxx
 Sales xxx

❖ Summary of Cost Sheet

Direct Material + Direct Labour + Direct Expenses = Prime Cost

Prime Cost + Factory Overheads = Factory Cost or Works Cost

Works Cost + Administrative Overheads = Cost of Production

Cost of Production + Selling and Distribution Overheads = Total Cost

❖ Procedure for Ascertaining Unit Cost

Cost Per Unit or Unit Cost = Total Cost of Production ÷ Number of Units
Produced or Total Quantity

❖ Items Excluded from Cost Account or Cost Sheet

I. Purely Financial Charges:
1. Loss on sale of fixed assets,
2. Interest on bank loan,
3. Discount on debentures,
4. Expenses of company’s transfer office,
5. Damages payable at law,
6. Fines and penalties,
7. Expenses on issue of shares and debentures,
8. Loss on investment, etc.
II. Purely Financial Incomes:
1. Profit arising from the sale of fixed assets,
2. Rents receivable,
3. Dividends and interest received on investment,
4. Transfer fees received,
5. Interest received on bank deposits, etc.
III. Appropriation of Profit:
1. Dividends paid on the share capital of the company,
2. Transfer to general reserve or any other fund of accumulated profits,
3. Amounts written off goodwill, preliminary expenses, discount on debentures etc.,
4. Charitable Donations,
5. Income Tax, etc.

Basic Illustrations
Illustration 1
Prepare a cost Sheet from the following particulars:
Particulars Amount (in
Rs.)
Material Cost 10,000
Wages 7,000
Works Overheads 3,000
Administrative Overheads 1,600
Selling Overheads 1,400
Sales 30,000

Illustration 2 (H/W)
The following cost data is obtained from the books of a Factory for the year ended 31st
December 2019:
Particulars Amount (in
Rs.)
Direct Material 90,000
Direct Wages 75,000
Profit 60,900
Selling and Distribution Overheads 52,500
Administrative Overheads 42,000
Factory Overheads 45,000

Prepare a cost Sheet indicating prime cost, works cost, production cost, total cost, and
sales value.

Illustration 3
A manufacturer presents the following details about the various expenses incurred by him:
Particulars Amount (in
Rs.)
Raw Material consumed 70,000
Factory cleaning 2,000
Factory rent 2,400
Bad debts 440
Printing and stationary 620
Legal expenses 350
Carriage outward 1,540
Indirect Material 560
Power 4,600
Depreciation on furniture 160
Postage expenses 465
Repair of plant and Machinery 1,200
Salesmen's expenses 3,400
Advertising 500
Direct wages 85,000
General manager’s salary 36,000
 Factory manager's salary 18,000
Depreciation on plant and machinery 1,240
Audit Fees 350

Prepare a cost Sheet indicating prime cost, works cost, production cost, total cost.

Illustration 4 (H/W)
Prepare a cost Sheet from the following particulars:
Particulars Amount (in
Rs.)
Direct Material 15,000
Direct labour 8,000
Direct Expenses 7,000
Indirect Material 500
Factory rent 2,000
Foreman’s salary 2,000
Gas and water 500
Fuel 200
Supervisors salary 2,000
Printing and Stationary 50
Postage and Telegram 50
Legal Charges 100
Depreciation on machinery 200
Bad debts 100
Travelling expenses to salesman 100
Depreciation on Office Equipment’s 100
Packing Expenses 50
Advertisement Expenses 250
Depreciation of delivery van 200
Carriage outward 100

Illustration 5 (H/W)
The following figures have been extracted from the books of ABX Ltd. For the year ending
31st March 2020.
Particulars Amount (in
Rs.)
Direct Material 70,000
Direct Wages 75,000
Indirect wages 10,000
Other direct Expenses 15,000
Factory rent and rates 5,000
Office rent and rates 500
Indirect Material 500
Depreciation of plant 1,500
Depreciation of Office Furniture 100
Managing Director’s remuneration 12,000
 General Factory expenses 5,700
General office expenses 1,000
General selling expenses 1,000
Travelling expenses 1,100
Office salaries 4,500
Carriage outward 1,000
Advertisement 2,000
Sales 2,50,000

From the above figures, calculate the following:

a. Prime cost,
b. Works cost,
c. Cost of production,
d. Total cost,
e. Net profit.

Illustrations on Calculation of Profit

Illustration 6
Ascertain the cost and selling price from the following:
Particulars Amount (in
Rs.)
Material consumed 6,000
Wages paid 9,000

Works on cost 50% on wages.

Office on cost 20% on works cost.
Selling on cost 10% on works cost.
Profit 20% on cost.

Illustration 7 (H/W)
From the following information prepare a cost sheet and determine the sales price by taking
20% profit on cost for the year ending 31st December 2018.
Particulars Amount (in
Rs.)
Direct Material 15,000
Productive wages 10,000
Direct Expenses 20,000
General Expenses 5,000
Depreciation of Office Furniture 1,500
Legal Charges 500
Collection Charges 2,500
Carriage Outward 1,000
 Gas and Water 500
Factory Insurance 1,000
Indirect Wages 2,000
Bad Debts 500
Director’s Remuneration 3,000
Discount Allowed 500
Repair of Machinery 500
Depreciation of Machinery 1,500
Coal and coke 250
Fuel and Oil 150
Showroom Expenses 2,000
Trade Magazine 100
Depreciation of Office Building 1,400
Indirect Expenses 100

Illustration 8
The Bajaj Manufacturing company provides following Details as on 31st December 2019:
Particulars Amount (in
Rs.)
Direct Material 7,500
Direct Labour 4,000
Direct Expenses 3,500
Indirect Material 250
Factory Rent 1,000
Foreman’s salary 1,000
Gas and Water 250
Fuel 100
Supervisors Salary 1,000
Printing and Stationary 25
Postage and Telegram 25
Legal Charges 50
Depreciation of Machinery 100
Bad Debts 50
Travelling Allowances to salesman 50
Depreciation of Office Equipment’s 50
Packing Expenses 25
Advertisement Expenses 125
Depreciation of Delivery Van 100
Carriage Outward 50

prepare a cost sheet and determine the sales price by taking 20% profit on sales.

Illustrations on Calculation of Unit Cost

 ❖ Procedure for Ascertaining Unit Cost

Cost Per Unit or Unit Cost = Total Cost of Production ÷ Number of Units
Produced or Total Quantity

Illustration 9
Deep Manufacturing Company provides the following information for the month March
2019:
Particulars Amount (in
Rs.)
Raw Material 28,000
Fuel 6,900
Electric Power 1,340
Process and General Wages 63,500
Repair of Machinery 2,400
Gas and Water 2,400
Factory Rent 1,060
Foreman’s Salary 2,000
Factory Insurance 300
General Expenses 7,000
Administrative Expenses 5,000
Depreciation of Plant 2,500
Units Manufactured 17,200 Units
Carriage Outward 1,200

Prepare a cost sheet to find out total cost and per unit cost of a product.

Illustration 10 (H/W)
Mahindra Company provides the following details for the year ending 31st December 2019:
Particulars Amount (in
Rs.)
Raw Material 14,000
Fuel 3,450
Electric Power 670
Process and General Wages 31,750
Repair of Machinery 1,200
Gas and Water 1,200
Factory Rent 1,000
Foreman’s Salary 1,000
Factory Insurance 150
General Expenses 3,500
Administrative Expenses 2,500
Depreciation of Plant 1,250
 Units Manufactured 8,600 Units
Carriage Outward 600

You are required-

a. To prepare a cost sheet,
b. Calculate cost per unit,
c. Calculate the sales price by considering 25% profit on sale.

Illustrations on Treatment of Stock in Cost Sheet

❖ Treatment of Stock in Cost Sheet

Particulars Amount (in Amount (in

Rs.) Rs.)
Opening Stock of Raw Material xxx
Add: Purchases xxx
Add: Carriage Inward xxx
Add: Octroi and Custom Duty +
Less: Closing stock of Raw Material -------------
→
Value of Material Consumed or Used
OR
Cost of Direct Material Consumed or used
Direct Material
Direct Labour or Wages/Productive Labour or Wages
Direct Expenses/Chargeable Expenses
A. Prime Cost xxx
Factory Overheads
Indirect Material
Indirect Wages or Labour/ Unproductive Wages or Labour
Leave Wages
Overtime Wages
Fuel and Power
Lubricant Oil
Factory Rent and Taxes
Factory Insurance
Factory Lighting
Factory Supervision/Supervisors Salary
Works Stationary
Factory Canteen and Welfare Expenses
Repair of Machinery
Salary of Works Manager
Depreciation of Plant and Machinery
Works Expenses/Indirect Expenses
Gas and Water
Technical Director’s Fees
Laboratory Expenses
Works Telephone Expenses
Internal Transportation Expenses
Factory Cleaning
Factory Electricity
Depreciation of Factory Building
Coal and coke
Drawing Office Salaries
Oil and Waste
Wages of Foreman
Storekeeper's Wages xxx
Consumable Store +

Add: Opening Stock of Work-in-progress

Less: Closing Stock of Work-in-progress

+
-------------
→
B. Factory Cost/Works Cost xxx
Office and Administrative Overheads
Office Salaries
Director’s Fees
Office Rent and Rates
Office Stationary and Printing
Sundry Office Expenses
Depreciation of Office Furniture
Subscription to Trade Journal or Magazine
Office Lighting
Establishment Charges
Director’s Travelling Expenses
Postage and Telegram
Legal Charges
Audit Fees
Depreciation and Repair of Office Equipment’s
General Expenses
Bank Charges
Office Electricity Charges
Office Cleaning
Depreciation of Office Building xxx
Telephone Charges +

Add: Opening Stock of Finished Goods

Less: Closing Stock of Finished Goods +
 -------------
→

C. Cost of Production xxx

Selling and Distribution Overheads
Advertising Expenses
Showroom Expenses
Bad Debts
Salesman's Salary and Expenses
Packing Expenses
Carriage Outward
Commission of Sales Agents
Collection Charges
Cost of Catalogues
Expenses of Delivery Van
Travelling Expenses
Cost of Tenders
Warehouse Expenses
Sales Manager’s Salary
Insurance of Showroom
Sales Director’s Fees
Sales Office Expenses
Rent of Sales Office
Depreciation of Delivery Vans
Expenses of Sales Branch Establishment xxx
Discount Allowed +

+
-------------
→

D. Total Cost xxx

Add: Profit + xxx
Sales xxx

❖ Summary of Treatment of Stock in Cost Sheet

Raw Material Work-in-progress Finished Goods

Opening Stock of Raw Factory Overheads Office and Administration
Material Add: Opening Stock of Overheads
Add: Material Purchased Work-in-progress
 Add: Carriage Inward Less: Closing Stock of Add: Opening Stock of
Less: Closing Stock of Raw Work-in-progress Finished Goods
Material Factory Cost Less: Closing Stock of
Value of Material Finished Goods
Consumed Cost of Production

Illustration 11
The Bangalore Auto Ltd. Supplies you the following information and requires you to prepare
a cost sheet:
Particulars Amount (in
Rs.)
Stock of Raw Material on 01st September 2019 75,000
Stock of Raw Material on 31st September 2019 91,500
Direct Wages 52,500
Indirect Wages 2,750
Sales 2,00,000
Work-in-progress on 01st September 2019 28,000
Work-in-progress on 31st September 2019 35,000
Purchases of Raw Material 66,000
Factory Rent, Rates and Power 15,000
Depreciation of Plant and Machinery 3,500
Expenses on Purchases 1,500
Carriage Outward 2,500
Advertising 3,500
Office Rent and Taxes 2,500
Traveller’s Wages and Commission 6,500
Stock of Finished Goods on 01st September 2019 54,000
Stock of Finished Goods on 31st September 2019 31,000

Illustration 12 (H/W)
Following information has been obtained from the records of a manufacturing company:
Particulars Amount (in
Rs.)
Stock of Raw Material on 01st January 2019 40,000
Stock of Raw Material on 31st December 2019 50,000
Stock of Finished Goods on 01st January 2019 1,00,000
Stock of Finished Goods on 31st December 2019 1,50,000
Work-in-progress on 01st January 2019 10,000
Work-in-progress on 31st December 2019 14,000
Indirect Labour 50,000
Lubricant Oil 10,000
Insurance on Plant 3,000
Purchase of Raw Material 4,00,000
Sales Commission 60,000
Salaries of Salesmen 1,00,000
Administration Expenses 1,00,000
 Carriage Outward 20,000
Power 30,000
Direct Labour 3,00,000
Depreciation on Machinery 50,000
Factory Rent 60,000
Property Tax on Factory Building 11,000
Sales 12,00,000

Prepare a statement of cost and profit showing:

a. Material Consumed
b. Prime Cost
c. Works Cost
d. Cost of Production
e. Total Cost
f. Profit.

Illustration 13 (H/W)
The following data of Costing information related to a handicraft association for the month
March 2020:
Particulars Amount (in
Rs.)
Stock of Raw Material on 01st March 2020 2,50,000
Stock of Finished Goods on 01st March 2020 1,70,000
Purchases of Raw Material 3,00,000
Direct Wages 1,70,000
Works Expenses 88,000
Office Expenses 30,000
Selling and Distribution Expenses 40,000
Work-in-progress on 01st March 2020 80,000
Work-in-progress on 31st March 2020 90,000
Stock of Raw Material on 31st March 2020 2,60,000
Stock of Finished Goods on 31st March 2020 1,60,000
Sale of Finished Goods 6,70,000
Income Tax 2,00,000
Dividend 10,000

Illustration 14
From the following particulars, prepare a cost sheet and ascertain the Sales by adding a profit
of 25% on sales.
Particulars Amount (in
Rs.)
Stock of Raw Material on 01st January 2019 30,500
Stock of Raw Material on 31st December 2019 48,500
Stock of Finished Goods on 01st January 2019 20,400
Stock of Finished Goods on 31st December 2019 10,000
Work-in-progress on 01st January 2019 8,000
 Work-in-progress on 31st December 2019 9,000
Purchases of Raw Material 25,000
Direct Wages 20,400
Factory Expenses 10,500
Office Expenses 5,400
Selling and Distribution Expenses 7,300

Illustration 15 (H/W)
From the following particulars, prepare a cost sheet and ascertain the Sales by adding a profit
of 20% profit on cost.

Particulars Amount (in

Rs.)
Opening Stock of Raw Material 5,000
Closing Stock of Material 3,000
Purchases 24,000
Carriage Inward 1,000
Direct Wages 25,000
Sundry Expenses 500
Electric Power 10,000
Direct Expenses 15,000
Factory Lighting 2,500
Repair of Machinery 1,200
Factory Rent and Rates 600
Office Salaries 5,000
Repair of Office Building 2,000
Carriage Outward 500
Advertisement 2,400
Bad Debts 100
Factory Insurance 400
Office Insurance 500
Opening Stock of Work-in-progress 2,400
Closing Stock of Work-in-progress 2,000
Opening Stock of Finished Goods 5,000
Closing Stock of Finished Goods 3,000

Illustration 16
Arjun Manufacturing company Produces 2,000 tonnes of output during the year 2018.
Particulars Amount (in
Rs.)
Opening Stock of Finished Goods 5,000
Closing Stock of Finished Goods 3,000
Opening Stock of Raw Material 3,000
Closing Stock of Raw Material 2,000
Purchases 26,000
 Carriage Inward 1,000
Direct Wages 23,000
Direct Expenses 15,000
Indirect Wages 500
Electric Power 10,000
Factory Rent 2,000
Factory Lighting 1,200
Repair of Machinery 600
Opening Stock of Work-in-progress 2,400
Closing Stock of Work-in-progress 2,000
Office Salaries 5,000
Sundry Expenses 500
Repair of Office Building 1,500
Carriage Outward 500
Advertisement 2,400
Bad Debts 100
Factory Insurance 400
Office Insurance 300
Depreciation of Plant and Machinery 1,000

You are required to-

a. Prepare Statement of Cost,
b. Determine the Sales price by taking 20% Profit on Cost,
c. Calculate per tonne cost of product.

Illustration 17
The following particulars have been extracted from the books of Aditya Manufacturing
company Ltd., Delhi, for the year ended 31st March 2019:
Particulars Amount (in
Rs.)
Stock of Material as on 01st April 2018 47,000
Stock of Material as on 31st March 2019 50,000
Material Purchased 2,08,000
Drawing Office Salaries 9,600
Counting House Salaries 14,000
Carriage Inward 8,200
Carriage Outward 5,100
Cash Discount Allowed 3,400
Bad Debts Written Off 4,700
Repairs of Plant, Machinery and Tools 10,600
Rent, Rates, Taxes and Insurance (Factory) 3,000
Rent, Rates, Taxes and Insurance (Office) 1,000
Travelling Expenses of Salesmen 3,100
Travelling Salaries and Commission 8,400
Production Wages 1,40,000
 Depreciation Written Off on Machinery, Plant, and 7,100
Tools
Depreciation Written Off on Furniture 600
Director’s Fees 6,000
Gas and Water Charges (Factory) 1,500
Gas and Water Charges (Office) 300
General Charges 5,000
Manager’s Salary 12,000

Out of 48 hours in a week, the time devoted by manager to the factory and office was
on an average 40 hours and 08 hours respectively throughout the accounting year.
You are required to prepare a cost sheet.

Illustration 18 (H/W)
From the following information prepare a cost sheet for the year ending 31st March 2020:
Particulars Amount (in
Rs.)
Wages:
1. Direct 75,000
2. Indirect 10,000
Rent and Rates:
1. Factory 5,000
2. Office 500
Salary:
1. Office 1,500
2. Salesman 2,000
Indirect Material 1,500
Office Expenses 900
Managing Directors Remuneration 12,000
Advertisement 2,000
Commission on Issue of Shares 6,000
Profit on sale of Capital Assets 2,000
Transfer to General Reserve 10,000
Factory Expenses 3,700
Selling Expenses 1,000
Travelling Expenses of Salesmen 1,100
Carriage Outward 1,000
Sales 2,30,000
Purchase of Raw Material 75,000
Other Direct Charges 15,000
Depreciation:
1. Plant 2,500
2. Office 1,100
Advanced Income Tax 15,000
Goodwill Written Off 8,000
 The Managing Directors Remuneration is to be allocated to Rs. 4,000/- to factory and
Rs. 2,000/- to office and Rs. 6,000/- to selling department.

Illustration 19
The following particulars have been extracted from the books of Sidhant Manufacturing
company Ltd., Delhi, for the year ended 31 st March 2019:
Particulars Amount (in
Rs.)
Purchases of Raw Material 1,20,000
Rent, Rates, and Insurance 40,000
Direct Wages 1,00,000
Carriage Inward 1,440
Opening Stock:
1. Raw Material 20,000
2. Finished Goods (1,000 tonnes) 16,000
Closing Stock:
1. Raw Material 22,240
2. Finished Goods (2,000 tonnes) 32,000
Work-in-progress:
1. Opening Stock 4,800
2. Closing Stock 16,000
Sale of Finished Product 3,00,000
Cost of Factory Supervision 8,000

Production during the period was 17,000 tonnes, Charge advertising and selling cost
Rs. 1 per tonne sold.
You are required to prepare a cost sheet and give the amount of net profit per tonne
sold.

Illustrations on Calculation of Tender Price

Price Quotations, Estimates, Tenders etc.

Suppliers may have to quote the prices of their products or submit estimates for
tenders etc. For this purpose of Cost sheet should be prepared to ascertain the price to be
quoted. All changes in prices and quantities of materials and other elements of cost over the
previous period should be taken into account while preparing such a cost sheet.

Illustration 20
From the following information prepare a cost sheet and tender price sheet.
Particulars Amount (in
Rs.)
Material 6,00,000
 Wages 5,00,000
Factory Overheads 3,00,000
Administrative Overheads 3,36,000
Selling Charges 2,24,000
Distribution Charges 1,40,000
Profit 4,20,000

A work order is considered by taking following expenses:

Material Rs. 8,000/-
Wages Rs. 5,000/-
Assuming that in 2017, the rate of Overheads will be 20% of Direct Wages,
Selling and Distribution Overheads will be 10% of Cost of Production,
Administrative Overheads will be 15% of Factory Cost.
The estimated price has to be fixed by assuming 10% profit on cost.

Illustration 21
The accounts of Machine manufacturing company discloses the following information for
the six months ending 31st December 2019:
Particulars Amount (in
Rs.)
Material used 1,50,000
Production Wages 1,20,000
Factory Overheads 24,000
Establishment Expenses 17,640

Prepare a cost sheet and calculate the price which the company should quote for
Manufacturing a machine requiring materials valued at Rs. 1,250/- and expenses productive
wages Rs. 750/-, Factory Overheads and Administrative expenses are 24,000 and 17,640
respectively. By considering 20% profit on selling price.

Illustration 22 (H/W)
The following data relating to the working of a factory in 2018 is available:
Particulars Amount (in
Rs.)
Direct Material consumed 2,00,000
Direct Wages 1,50,000
Factory Expenses 90,000
Administrative Expenses 88,000

Based on the above data prepare a cost sheet and quotation price by taking 20% profit
on selling price. Material required for the job will be Rs. 2,000/- and Wages for the job will
be Rs. 2,000/- , Factory Overheads Rs.45 000 and Administrative expenses Rs. 44,000.
**********