Cost Sheet Questions
Cost Sheet Questions
COST SHEET
Question 1:
Purchase figure is missing:
The books of Delta Manufacturing Company present the following data for the month of April, 2014:
Direct labour cost Rs. 17,500 (175% of works overhead); Cost of goods sold (excluding administration
overhead) Rs. 56,000; Selling overheads Rs. 3,500; Administration overheads Rs. 2,500; Sales for the month-
Rs. 75,000.
Inventory accounts showed the following opening and closing balances:
As on 1st April (Rs.) As on 30th April (Rs.)
Raw materials 8,000 10,600
Work-in-progress 10,500 14,500
Finished goods 17,600 19,000
You are required to:
i. Compute the value of materials purchased,
ii. Prepare a cost statement showing the various elements of cost and also the profit earned.
[B.Com. (Hons.) 2014-Adapted]
Question 2:
The following figures are available from the books of Best Manufacturing Company for the year ended on 31st
December 2009:
Amount Amount
Materials: Direct wages 7,500
Stock on 1.1.09 1,000 Profit for the year 6,090
Stock on 31.12.09 2,000 Selling overhead 5,250
Purchases during 2009 10,000 Administration overhead 4,200
Factory overhead 4,500
i. Prepare a Cost Sheet showing prime cost, works cost, cost of production, cost of sales and sales.
ii. In 2010, the factory receives an order for a job which will require Materials cost Rs. 1,200 and Wages Rs.
750. Ascertain the sale price of the job if the factory intends to earn a profit 10% higher than that in 2009.
2
Assume that the factory overhead has gone up by 16 % and selling overhead has gone down by 20% in 2010.
3
Further assume that factory overhead is recovered as a percentage of wages and administration and selling
overhead as a percentage of works cost. [B. Com (Hons.) C.U. Adapted]
Question 3:
The following extract of cost information relates to a commodity for the year ended on 31st March, 2010:
Stock on 1st April 2009: Raw Materials Rs. 5,000 and Finished Products (1,000 Tonnes) Rs. 4,000; Stock on 31st
March, 2010: Raw Materials Rs. 5,560 and Finished Products (2,000 Tonnes) Rs. 8,000; Raw Materials
purchased Rs. 30,000; Direct Wages Rs. 25,000; Rent, Rates & Insurance of Works Rs. 10,000; Carriage Inwards
Rs. 360; Work-in-progress on 1st April 2009 Rs. 1,200 and on 31st March 2010 Rs. 4,000; Cost of Factory
supervision Rs. 2,000; Sales of Finished Product Rs. 75,000; Advertisement and selling overheads amount to
25 paise per tonne sold. 16,000 tonnes were produced during the year.
Prepare a statement showing: (a) the value of raw materials used, (b) the cost of output for the year, (c) the
cost of turnover for the year, (d) the net profit for the year, and (e) the net profit per tonne of the commodity.
Question 4:
From the following particulars relating to production and sales for the year ended on 31st December, 2009,
prepare a statement of cost showing, inter alia, the prime cost, factory cost, cost of production, cost of goods
sold as well as per unit cost of sales and profit.
As on 1.1.2009 (Rs.) As on 31.12.2009 (Rs.)
Raw materials 16,000 19,600
Work-in-progress 12,600 4,600
Finished goods 16,400 (3,000 units) ? (2,500 units)
Other information for the year:
Purchase of raw materials: 1,11,600; Sale of finished goods (40,500 units): 2,83,500; Productive wages: 67,200;
Office and administration overheads: 20,800; Selling and distribution overheads 50 paise per unit sold;
Machine hour rate 2.50; Machine hours worked: 8,000 hours.
Assume that sales are made on the basis of 'first-in, first-out principle. [B.Com (Hons.) 2006 C.U.-Adapted]
Question 5:
Work-in-progress is shown at prime cost plus manufacturing expenses:
From the following particulars relating to the production and sales for the year ended on 30th June, 2009,
prepare a cost statement showing therein: (i) prime cost, (ii) works cost, (iii) cost of production, (iv) cost of
sales, and (v) profit per unit.
Amount Amount
Raw materials as on 1.7.2008 12,500 Administration overheads Rs. 2 per unit
Work-in-progress as on 1.7.2008: Selling overhead Rs. 1 per unit
At prime cost 15,000 Distribution overheads 15,000
Manufacturing expenses 3,000 18,000 Sale of finished goods (28,000 units) 4,00,000
Finished goods at cost as on 1.7.2008 Raw materials as on 30.6.2009 20,000
(8,000 units) 60,000 Work-in-progress as on 30.6.2009:
Raw materials purchased 1,10,000 At prime cost 10,000
Freight on raw materials purchased 5,000 Manufacturing expenses 8,000 18,000
Loss of materials by fire 5,000 Stock of finished goods on 30.6.2009 (10,000 units) ?
Factory overheads 70,000
Chargeable expenses 25,000
Direct labour cost 1,35,000
Assume sales are made on FIFO basis. [B.Com (Hons.) C.U. Adapted]
Question 6:
From the following particulars relating to the production and sales for the year ended on 31st March 2010,
prepare a statement of cost showing therein: (i) prime cost, (ii) works cost, (iii) cost of production, (iv) cost of
sales, and (v) profit per unit:
Amount Amount
Opening Inventory (1.4.2009): Raw materials purchased 72,000
Raw materials 6,000 Productive wages 18,000
Work-in-progress 9,620 Machine hours worked 21,600 Hrs.
Finished goods (1,000 units) 13,680 Machine hour rate 1.50
Closing inventory (31.3.2010): Chargeable expenses 16,400
Raw materials 7,000 Selling overhead Rs. 0.90/unit
Work-in-progress 8,020 Units sold 8,000 units
Finished goods (1,000 units) ? Units produced 8,200 units
Office and Administration overhead Rs. 1/unit
Profit on sale 10 %
[B.Com. Hons.) C.U.-Adapted]
Question 7:
Earning the same rate of profit on selling price as earned in the previous year:
Following figures were extracted from the records of a company for the year 2008:
Amount Amount
Direct materials cost 60,000 Direct wages 50,000
Works overhead 30,000 Administration overhead 33,600
Selling overhead 22,400 Distribution overhead 14,000
Profit 52,500
A commodity has been manufactured and supplied to Mr. X in 2009 for which following costs were incurred:
Direct materials cost Rs. 4,000; Direct wages Rs. 2,000.
In 2009, works overhead was increased by 20%, distribution overhead was decreased by 10% and selling &
administration overhead each were increased by 12.5%.
At what price the above supply is to be billed to Mr. X so as to earn the same rate of profit on selling price as
earned in 2008.
Question 8:
Consideration of cost behaviour
Mohit Ltd. furnished the following information in relation to the production of 2,000 units of product N' for
the year 2011: Rs.
i. Direct materials 2,00,000
ii. Direct labour 1,50,000
iii. Indirect wages (50% fixed) 40,000
iv. Consumable stores (70% variable) 30,000
v. Office rent (100% fixed) 60,000
vi. Selling expenses (40% variable) 80,000
In the year 2012, it is estimated that the production will increase by 50%. The price of materials and labour
will go up by 10% and 20% respectively.
You are required to compute selling price per unit of product ‘N’ for the year 2012 if the company wishes to
maintain a profit @ 10% on cost.