COST SHEET PROBLEMS

Other interest and financing charges for

production of goods / operations or service
rendered (CAS -17) (Only Net)
 Interest on Bank Loan

 Cash Discount allowed on sales (to

customers)


 Total Cost

Direct Cost Indirect Cost

Direct Materials Indirect Materials

Direct Expenses Indirect Expenses
Direct Wages Indirect Wages

Raw Materials – First Head

Forms of Material W-I-P -- Second Head (Factory Over Head)
Finished Goods – Third Head (Office Over Head)
1. From the following particulars of a manufacturing concern,
ascertain the Prime Cost
  Statement Showing Prime Cost
 Particulars Amount Total

 Opening Stock of Raw Materials 20,000

 Add: Purchase of raw materials 1,05,000
 Import Duty 15,000
 Carriage Inward 5,000
 Primary packing Materials 3,000 1,28,000
 1,48,000
 Less : Closing Stock of Raw Materials 30,000

 Raw Materials Consumed 1,18,000

 Add : Productive Wages/ Direct Wages 95,000

 Add: Direct Expenses

 Hire Charges on plant 14,000
 Other chargeable expenses 6,000 20,000

 Prime Cost 2,33,000

 2. Calculate Prime cost from the information given below.

 Purchase of raw materials- Rs. 50,000.

 Opening stock of raw materials- Rs.4,000.
 Closing stock of raw materials- Rs. 3000.
 Direct Wages- Rs. 16,000.
 Carriage/Freight inwards- Rs.2,000.
 Carriage outwards - Rs. 3,500.
 Direct expenses- Rs. 4,500.
 Indirect expenses- Rs.6,700.
 Duty on Purchase- Rs.250
 Materials returned to suppliers (P/R)- Rs. 100
 Material Sold- Rs. 250
 Material Transferred to firm- Rs. 200
 Scrap Sold Materials- Rs. 100
 Loss by Fire Materials- Rs. 800
 Calculation of Prime Cost.
 Statement Showing Prime Cost
Particulars Amount Total

Opening Stock of Raw Materials 4,000

Add: Purchase of raw materials 50,000
Carriage Inward 2,000
Duty on Purchase 250
56,250

Less : Material returned to suppliers (P/R) 100

Material Sold 250
Material Transferred to Firm 200
Scrap Sold Materials 100
Loss by Fire Materials 800
Closing Stock of Raw Materials 3,000 4,450

Raw Materials Consumed 51,800

Add : Productive Wages/ Direct Wages 16,000

Add: Direct Expenses 4,500

Prime Cost 72,300

 3. From the following information for the month of January prepare cost sheet to show
following components.
a) Prime cost. b) Factory cost. C) Cost of production. D) Total cost.

Direct material- Rs. 57,000 Drawing Office Salary- Rs 800

Direct wages- Rs. 28,500 Office rent & rates- Rs. 500
Direct expenses – Rs. 10,000 Office Insurance- Rs. 700
Factory rent & rates- Rs. 4,500 Sundry office Expenses-Rs. 600
Indirect wages Rs. 5,000 Office Salary- Rs.1,600
Plant repairs & maintenance Rs.1,000 Director’s remuneration(office)Rs.1,500
Plant depreciation- Rs. 1,250 Telephone & postage- Rs. 200
Factory heating & lighting- Rs. 400 Printing & stationery- Rs.100
Factory manager’s salary- Rs.2,000 Legal charges- Rs. 150
Motive Charges- Rs. 4,600 Counting House Salary-Rs. 900
Haulage- Rs. 3,500 Audit fees- Rs. 800
Director Fees(Work/Factory)-Rs.1,500 Bank Charges-Rs. 700
Electricity Charges- Rs. 1,500 Advertisement- Rs. 1,500
Fuel, Gas lubricants Etc- Rs. 1,000 Salesmen’s salary- Rs. 2,500
Work Stationary- Rs 500 Showroom rent- Rs. 500
ESI-Rs. 600 Rent of Ware house- Rs. 500
Indirect Expenses- Rs. 700 Commission on Sales – Rs. 1,920
Depreciation On Furniture Rs. 2,400 Upkeep of Delivery Van-Rs. 600
 Statement Of Cost Sheet
Particulars Amount Total
Direct Materials 57,000
Direct Wages 28,500
Direct Expenses 10,000
Prime Cost 95,500
Add: Factory Overhead

Factory rent & rates 4,500

Indirect wages 5,000
Plant repairs & maintenance 1,000
Plant depreciation 1,250
Factory heating & lighting 400
Factory manager’s salary 2,000
Motive Charges 4,600
Haulage 3,500
Director Fees (Work/Factory) 1,500
Electricity Charges 1,500
Fuel, Gas ,Lubricants Etc 1,000
Indirect Expenses 700
Depreciation On Furniture 2,400
Water Supply 1000
Loose Tools Written Off 500
Estimating Expenses 700
Drawing Office Salary 800
Work Stationary 500
ESI 600 33,450
Add: Office & Administration overheads

Office Salary 1,600

Director’s remuneration(Office) 1,500
Telephone & postage 200
Printing & stationery 100
Legal charges 150
Office rent & rates 500
Office Insurance 700
Sundry office Expenses 600
Counting House Salary 900
Audit fees 800
Bank Charges 700 7,750

Cost of Production 1,36,700

Add: Selling Overheads

Advertisement 1,500
Salesmen’s salary 2,500
Showroom rent 500
Rent of Ware house 500
Commission on Sales 1,920
Upkeep of Delivery Van 600
Bad Debts 200
Depreciation of Delivery Van 400 8,120

COST Of Sales/Total Cost 1,36,700

Profit (1,40,00-1,36,700 ) 40,820

Sale 1,40,000
4. The following particulars have been obtained from the cost records for the Year
Assume that all products manufactured during the year have been sold to earn a profit
of 20% on selling price
 Statement Of Cost Sheet

Particulars Amount Total

Direct Materials 1,10,000
Direct Materials used 20,000
Freight on materials purchased 5,000
1,35,0000
Direct Labour
Productive wages 30,000

Chargeable expenses 10,000

Prime Cost 1,75,000
Add: Factory Overhead
Materials used in factory 1,500
Factory supervision expenses 4,000
Factory Indirect expenses 2,000
Depreciation on factory building 3,500 11,000
Works/ Factory Cost 1,86,000
Add: Office & Administration overheads
Materials used in office 2,500
Administration Expenses 3,000
Depreciation on Office building 1,500 7,000
Cost of Production 1,93,000
Add: Selling Overheads
Materials used in selling the product 3,000
Advertisement 2,000
Bad Debt 1,500 6,500
1,99,500
Add: Distribution Overheads
Depreciation on Delivery Van 1,000
Salary to driver of delivery van 3,600 4,600
COST Of Sales/Total Cost 2,04,100
Profit @20% on cost 40,820
Sale
2,44,920
5.From the following information prepare a cost sheet.

Company Desire a Maergi of 20% profit on the cost of sales

Particulars Amount
Direct material-purchased 80000
Direct material -Opening stock 20000
Direct material -Closing Stock 25000
Productive wages 22,000
Direct Expenses 5,000
Consumable stores 4000
Factory manager salary 15000
Unproductive wages 7000
Factory Overheads 12,000
Work-in-progress:
Opening stock 13,000
Closing stock 7,000
Office and administration overheads 28,000
Opening stock of finished goods 5000
Closing stock of finished goods 10000
Selling and distribution overheads 33,000
 Statement of Cost Sheet
Particulars Amount Total

Direct Materials-Purchased 80,000

Add : Opening Stock of Raw Materials 20,000
1,00,000
Less : Closing Stock of Raw Materials 25,000
Materials Consume 75,000
Direct Wages 22,000
Direct Expenses
5,000 Prime Cost 1,02,000
Add: Works OR Factory Overheads
Consumable stores 4,000
Factory manager salary 15,000
Unproductive wages 7,000
12,000
38,000

Add : Opening Stock of WIP 13,000

Less : Closing Stock of WIP 7,000
44,000
Factory / Works Cost 1,46,000
(Previous Page Balance)
Add : Administration/Office overhead 28,000
Cost of Production 1,74,000
Add : Opening Stock of Finished Goods 5,000
1,79,000
Less : Closing Stock of Finished Goods 10,000
Cost of goods Sold 1,69,000
Add :Selling and Distribution Overhead 33,000
Cost of Sales/Total Cost 2,02,000

Add : Profit @ 20% on cost of sales

( 2,020,000 X 20%) 40,400
Sales 242,400