Questions:-
1) Dunkel ltd. Started a factory in Navi mumbai on 1st April 2003. Following details are
furnished about its activity during the year ended 31st March, 2004:- (Royalty,Works OH
@ Machine hour)
Raw Material consumed-40,000 units @ Rs 7 per unit.
Direct wages :(a)Skilled worker Rs 9 per unit.
(b) Unskilled worker Rs 6 pere unit.
Royalty (on raw material consumed) @ Rs 3 per unit.
Works overheads @ Rs 8 per machine hour.
Machine Hours worked : 25,000
Office Overheads at 1/3rd of works cost.
Sales comission @ Rs 4 per unit.
Units produced 40,000.
Stock of units at the end : 4,000 units to be valued at cost of production per unit.
Sale price is Rs 50 per unit.
Prepare cost sheet showing the various elements of cost both in total and per unit.
2) Prepare a cost sheet showing the total and per tonne cost of paper manufactured by
Times Paper Mills ltd. For the month of March, 2004. There were 2 working days in the
month. Also find the profit earned bu the company. The details are as under:( Computing each element of direct cost)
Direct raw materials:
Paper pulp
Direct labour :
280 Skilled workmen
300 semiskilled workmen
470 unskilled workmen
Direct expenses:
Special equipments hire charges
Special dyes
Work overheads: variable
Fixed
Adiministration overheads
Selling and distribution Overheads
Opening stock of paper
Closing stock of paper
The paper is sold @ Rs 3,000 per tonne.:
: 6,000 tons @ Rs 9000 tonne.
: Rs 250 per day
: Rs 150 per day
: Rs 100 per day
: Rs 12,000 per day
: Rs 250 per tonne of total raw material input
: @ 50% of direct wages
: Rs 2,70,000 p.m.
: @12% of works cost.
: Rs 80 per tonne sold.
: 500 tonnes valued @ Rs 2,501.60 per ton
: 300 tonnes valued at cost of production.
3) The state government granted licence to sweet sugar ltd. to manufacture and sell sugar
with a stipulation that 40% of the output should be sold to the state government at a
controlled price of Rs 3,000 per ton and the balance output can sold in the open market
at any price. Following are the details of the Sweet Sugar Ltd. for the year ended 31st
March,2004.
During the year 3,600 tons Sugarcane was consumed @ Rs 1,000 per ton.
Direct labour amounted to Rs 825 per ton of sugar produced.(Dual Pricing)
The details of other expenditure are as follows:Particulars
Rs
Direct wages
Telephone Charges
Office computer purchased
Factory rent and insurance
Machinery purchased
Machinery repairs
Commission on sales
Factory salaries
Carriage Outward
Packing Expenses
Bank interest
Factory electricity
Delivery van expenses
Coal consumed
Depreciation on machinery
Depreciation on computer
Depreciation on delivery van
Office salaries
Printing and stationery
4,20,000
3,52,695
2,75,350
3,54,760
4,25,560
98,847
3,37,650
2,19,588
1,54,090
1,94,450
1,65,895
2,61,880
1,06,850
3,80,125
2,49,600
2,04,180
1,57,360
1,89,325
1,13,000
During the year 2,400 tons of sugar was produced.
The companys profit target for the year,for fixing the open market selling price on the
basis of cost sheet, is 10% of its average paid-up capital of Rs 1,42,56,000.
Prepare cost sheet and find various components of total cost and per unit cost and
suggest the selling price for open-market.
4) The cost of sale of production A is made up as follows:Material used in manufacturing
Rs 5,500
Material used in packing material
Rs 1,000
Material used in selling the product
Rs 150
Material used in the factory
Rs 175
Material used in the office
Rs 125
Labour required in production
Rs 1,000
Labour required for supervision in factory
Rs 200
Expenses direct factory
Rs 500
Expenses indirect factory
Rs 100
Expenses office
Rs 125
Depreciation of office building
Rs 75
Depreciation on factory plant
Rs 175
Selling expenses
Rs 350
Freight on material
Rs 500
Advertising
Rs 125
Assuming that all products manufactured and sold, what should be the selling price be fixed to
obtain a profit of 20% on selling price.
5) Prepare a statement of cost from the following trading and P/L account for the
year ending March 31, 2008
Particular
To opening stock material
Amount (Rs)
12,000
Particular
By sales
Amount (Rs)
2,00,000
Finished goods
To purchases
40,000
1,20,000
To cost of moulds
3,000
To salary of factory manger
1,000
To depreciation of machine
800
To gross profit
By
closing
material
stock
Finished goods
20,000
50,000
63,200
--------------
---------------
2,70,000
2,70,000
--------------
-------------
To office salary
9,000
By Gross profit
To salesman salary
6,000
By interest from bank
800
To insurance of office building
1,000
By dividend received
200
By rent received
900
To godown expenses
To directors fees
To telephone charges
800
2,000
700
To showroom expenses
1,200
To delivery van expenses
1,500
To preliminary expenses
2,000
To interest on deb.
700
To market research exp.
600
To net profit
63,200
39,000
--------------
--------------
65,100
65,100
--------------
--------------
Answers:1)
DUNKEL LIMITED
COST SHEET FOR THE YEAR ENDED 31-3-2004
(OUTPUT : 40,000 UNITS)
ELEMENTS OF COST
Rs
Total
Cost
Units
No.
Rs.
A. Direct materials
Raw Materials(40,000x7)
B. Direct wages
-Skilled workers(40,000x9)
3,60,000
-unskilled workers(40,000x6)
2,40,000
C. Direct Expenses
Royalty on Raw Materials (40,000x3)
1,20,000
D. Prime Cost
E. Works overheads (25,000x8)
F. Works Cost
G. Office overheads (1/3 of works Cost)
H. COST OF PRODUCTION
I. Less: Stock of finished goods
(4,000x40)
J. COST OF GOODS SOLD
K. Sales overheads:
-sales commission (36,000 x 4)
L. COST OF SALES
M. PROFIT
N. SALES
Units
Cost
Rs.
2,80,000
40,000
7.00
6,00,000
40,000
15.00
40,000
3.00
10,00,00
0
40,000
25.00
40,000
5.00
40,000
30.00
12,00,00
0
40,000
10.00
4,00,000
40,000
40.00
2,00,000
16,00,00
4,000
1,60,000
36,000
40.00
14,40,00
0
36,000
4.00
36,000
44.00
1,44,000
36,000
6.00
15,84,00
0
36,000
50.00
2,16,000
18,00,00
0
2)
TIMES PAPER MILLS LIMITED
Cost sheet for the month ended 31-3-2004
ELEMENTS OF COST
Total
Cost(Rs)
A. Direct Materials:
-Raw Materials (6,000 x 900)
B. Direct Wages:
-Skilled Workmen (280 x 250x26)
-Semi-skilled
workmen(300x150x26)
-Unskilled Workmen (470x100x26)
C. Direct Expenses:
-Equipment hire
charges(12,000x26)
-Special dyes(250x6,000)
D. PRIME COST
E. Works Overheads
-Variable (50%of direct wages)
-Fixed
F. WORKS COST
G. Administrative Overheads
(12% of works cost)
H. COST OF PRODUCTION
I. Add:Opening stock of finished
goods
(500x2,501.60)
J. Less: Closing Stock of Finished
goods
(300x2,576)
K. COST OF GOODS SOLD
L. SELLING AND DISTRIBUTION O/H
(80 x 6,200)
M. COST OF SALES
N. PROFIT
O. SALES
Tons
Cost per
Ton(Rs)
54,00,000
6,000
900
18,20,000
11,70,000
12,22,000
42,12,000
6,000
702
3,12,000
15,00,000
18,12,000
6,000
302
1,14,24,000
6,000
1,904
23,76,000
6,000
396
1,38,00,000
16,56,000
6,000
6,000
2,300
276
1,54,56,000
6,000
2,576
12,50,800
500
1,67,06,800
7,72,800
6,500
300
1,59,34,000
4,96,000
6,200
6,200
2,570
80
1,64,30,000
21,70,000
6,200
6,200
2,650
350
21,06,000
2,70,000
1,86,00,000
6,200
3,000
3)
SWEET SUGAR LIMITED
Cost sheet for the year Ended 31st March 2004
(Output:2400 Tons)
ELEMENTS OF COST
TOTAL COST
COST PER TON
Rs
A.
B.
C.
D.
E.
Direct Material:Sugarcane
Direct Labour
Direct Expense
PRIME COST
Factory Overheads:
Factory rent
Coal consumed
Factory salary
Machinery repairs
Factory electricity
Machinery depreciation
F. WORKS COST
G. Office Overheads:
Salary
Printing and stationery
Telephone
Depreciation on computer
H. COST OF PRODUCTION
I. Sales Overheads:
Commission
Carriage outward
Packing expenses
Delivery van expenses
Depreciation on vans
J. COST OF SALES
Less: Sold to Govt. (960 tons x
3000)
3,54,760
3,80,125
2,19,588
98,847
2,61,880
2,49,600
1,89,325
1,13,000
3,52,695
2,04,180
3,37,650
1,54,090
1,94,450
1,06,850
1,57,360
K. PROFIT (10% of Rs 1,42,56,000)
L. SALES (Open Market)
Rs
TONS
Rs
36,00,000
19,80,000
4,20,000
60,00,000
2,400
2,400
2,400
2,400
1,500
825
175
2,500
15,64,800
2,400
652
75,64,800
2,400
3,152
8,59,200
2,400
358
84,24,000
2,400
3,510
9,50,400
2,400
396
93,74,400
28,80,000
64,94,400
14,25,600
79,20,000
2,400
960
1,440
1,440
3,906
----5,500
4)
Cost Sheet
Particular
Amount (Rs)
Amount (Rs)
Amount (Rs)
Direct material:Material used in manufacturing
5,500
Material used in Packing material
1,000
Freight on material
500
-------------
7,000
Direct wages:labour require in production
1,000
Direct expenses:- Direct factory
500
------------
Prime cost
8,500
Add:- Factory overhead
Indirect material used in factory
75
Indirect labour required for supervision
200
Indirect factory expenses
100
Depreciation factory
175
-------------
275
-------------
Factory on works cost
550
9050
Add:- office & administrative expenses
Indirect material
Indirect expenses office
Indirect depreciation
125
125
75
------------
200
-------------
Total cost of production
325
9375
Add:- selling and distribution overhead:Indirect material
150
Indirect expenses
350
Advertisement
125
------------
475
-------------
Cost of sales
625
10,000
Profit
2,500
----------Sales
12,500
5)
Statement of cost
(For the year ending 31st March 2008)
Particular
Direct material:-
Details (Rs)
Amount (Rs)
Raw material purchased
Add:- opening stock of raw materials
1,20,000
12,000
---------------
Raw material for consumption
Less:- Closing sock of raw materials
1,32,000
20,000
---------------
Raw material consumed
Add:- Direct labour
1,12,000
30,000
---------------
Prime cost
1,42,000
Add:- Factory overhead:Cost of moulds
3,000
Factory manager salary
1,000
Depreciation on machinery
800
---------------
4,800
---------------
Factory cost
1,46,800
Add:- office and administrate overhead
Salary
9,000
Insurance
1,000
Directors fees
2,000
Telephone charges
700
---------------
12,700
-------------
Cost of production
Add:- Opening stock of finished goods
1,59,500
40,000
--------------
Goods available for sales
1,99,500
Less:- Closing stock of finished goods
50,000
--------------
Cost of goods sold
1,49,500
Add:- selling & distribution ext:Salesmans salary
6,000
Insurance (godown)
800
Showroom expenses
1,200
Expenses of delivery van
1,500
Market research expenses
600
-------------
10,100
----------------
Cost of sales
1,59,600
Profit
40,400
---------------Sales
2,00,000
