Cost sheet -Problems

1.You are required to compile a statement showing cost and profit from the information
given. Showing clearly a. Material consumed b. Prime cost c. Work cost d. Cost of
Production e. Cost of sales f. Profit and g. Sales
Material Purchased Rs.2,00,000
Wages Rs.1,00,000
Direct Expenses Rs.20,000
Opening stock of Materials Rs.40000
Closing Stock of Materials Rs.60,000
Factory overhead is absorbed at 20% on wages, Administration overheads is 25% on the
work cost, Selling and distribution overheads are 20% on the cost of production and Profit is
20% on Sales
Answer: a. Material consumed-Rs.180000 b. Prime cost-Rs.300000 c. Work cost-Rs.320000
d. Cost of Production-Rs.400000 e. Cost of sales-Rs.480000 f. Profit-Rs.120000 and g. Sales-
Rs.600000
2.During the year 2018 X Ltd., produced 50000 units of a product. The following were the
Expenses:
Stock of Raw materials on 1.1.2018 Rs.10000
Stock of Raw materials on 31.12.2018 Rs.20000
Purchases Rs.1,60,000
Direct Wages Rs.75,000
Direct Expenses Rs.25,000
Factory Expenses Rs.37,500
Office Expenses Rs.62,500
Selling Expenses Rs.25,000
You are required to prepare a cost sheet showing cost per unit and total cost at each stage.
Answer: Prime cost-Rs.250000 (Rs.5 per unit); Factory Cost-Rs.287500(Rs.5.75 per unit);
Cost of Production-Rs.350000(Rs.7 per unit); Cost of Sales-Rs.375000(Rs.7.50per unit)
3.M/S Indu industries Ltd are the manufacturers of Moonlight Torches. The following data
relate to manufacture of torches during the month of March 2019.
Raw materials consumed Rs 20,000
Direct labour charges ` Rs 12,000
Machine hours worked 9500 hours
Machine hour rate ` Rs 2
Administration overheads 20% on works cost
Selling overhead Re. 0.50 per unit
Units produced 20000 units
Units sold 18,000 at Rs 5 per unit
You are required to prepare a cost sheet from the above, showing:
(a) the cost per unit,
(b) cost per unit sold and profit for the period.

Answer: Prime cost-Rs.32000 (Rs.1.60 per unit); Factory Cost-Rs.51000(Rs.2.55 per unit);
Cost of Production-Rs.61200(Rs.3.06 per unit); Cost of Sales-Rs.64080(Rs.3.56per unit);
Profit-Rs.25920(Rs.1.44 per unit); Sales -Rs.90000 (Rs.5 per unit)
4.The accounts of a machine manufacturing company disclose the following information for
6 months ending 31st December 2018.
Materials used Rs.150000
Direct Wages Rs.120000
Factory Overheads Rs.30000
Administrative expenses Rs.15000
Prepare a cost for the half year and calculate the price which the company should quote for
the manufacture of a machine requiring materials valued at Rs.1250 and expenses in
productive wages Rs.750, so that the price might yield a profit of 20% on the selling price
Answer: Prime cost -Rs.270000; Work cost-Rs.300000; Cost of Production-Rs.315000;
Sale Price to be quoted-Rs.2871.10
5.From the following particulars, prepare a cost statement:
Rs
Stock, 1-1-2013: Raw materials 30,500
Finished goods 20,400
Stock, 31-1-2013: Raw materials 48,500
Finished goods 10.000
Purchase of raw materials 25,000
Work-in-progress, 1-1-2013 8,000
Work-in-progress, 31-1-2013 9,000
Sales 95,000
Direct wages 20,400
Factory expenses 10,500
Office expenses 5,400
Selling expenses 3,800
Distribution expenses 2,500
Also calculate the percentage of works expenses to direct wages and the percentage of office
expenses to works cost.

Answers: Prime cost: Rs 27,400; Works Cost: Rs 36,900; Cost of production: Rs 42,300;
CGS: Rs 52,700; Profit: Rs 36,000
Percentage of works expenses to direct wages: 51.47%; Percentage of office expenses to
works cost: 14.63%

COST ACCOUNTING PROBLEMS-TUTORIALS

1. Prepare a cost sheet of the following data relating to the manufacture of Jeans:
Number of Jeans manufactured during the month 1,000
Rs
Direct materials consumed 20,000
Direct labour 8,000
Indirect labour (in factory) 2,500
Supervision costs (in factory) 1,000
Factory premises rent 1,600
Factory lighting 600
Oil for machines 100
Depreciation of machines 500
Office overheads 8,000
Office salaries 2,000
Misc. office expenses 1,000
Selling and distribution overheads 6,000
Note: A profit margin of 20% on the total cost of goods is expected on the sale of Jeans.

Answer: Prime cost:28,000; Work Cost: 34,300; Cost of Production: 45,300; Total cost
51,300; Profit: 10,260; Sales: 61,560

2. From the following information for the month of January, prepare a Cost Sheet to show
the following components: (a) Prime Cost, (b) Factory Cost, (c) Cost of Production, (d)
Total Cost.
Rs
Direct material 57,000
Direct wages 28,500
Factory rent and rates 2,500
Office rent and rates 500
Plant repairs and maintenance1,000
Plant depreciation 1,250
Factory heating and lighting 400
Factory manager’s salary 2,000
Office salaries 1,600
Director’s remuneration 1,500
Telephone and postage 200
Printing and stationery 100
Legal charges 150
Advertisement 1.500
Salesmen’s salaries 2,500
Showroom rent 500
Sales 1,16,000

Answer: Prime cost: Rs 85,500; Factory cost: Rs 92,650; Cost of Production: rs 96,700;
Total Cost: Rs.1,10,200; Profit: Rs. 14,800

3. Mr. Gopal furnishes the following data relating to the manufacture of a standard product
during the month of April 2013 :
Raw materials consumed Rs 15,000
Direct labour charges ` Rs 9,000
Machine hours worked 900
Machine hour rate ` Rs 5
Administration overheads 20% on works cost
Selling overhead Re. 0.50 per unit
Units produced 17,100
Units sold 16,000 at Rs 4 per unit
You are required to prepare a cost sheet from the above, showing:
(a) the cost per unit,
(b) cost per unit sold and profit for the period.
Answer: Prime cost: Rs 24,000; Factory cost: Rs 28,500; Cost of Production: Rs 34200; Cost
of goods sold Rs.32000 Total Cost: Rs.40000; Profit: Rs. 24000