PREPARATION OF COST SHEET

Problem.No.1
The following cost data are available from the books for the year ended 31.12.2006
Direct materials Rs.1,66,000;
Direct wages Rs.1,18,000;
Direct expenses Rs.72,000
Factory overheads Rs.48,000; Office & administrative overheads Rs.36,000; Sales Rs.6,00,000
Prepare a cost sheet indicating the prime cost, works cost, production cost, cost of sales and sales value

Problem.No.2
Prepare a cost sheet from the following details:
Raw materials consumed Rs.80,000; Wages- Rs.20,000. Works expenses are charged at 100% of wages. Office
overhead is charged at 25% on works cost and selling overhead at 10% on works cost.

Problem.No.3
From the following information prepare a cost sheet for the month of January
Particulars Rs.
Stock of raw materials on 1st January 25,000
st
Stock of raw materials on 31 January 26,200
Purchase of raw materials 21,900
Carriage on purchases 1,100
Sale of finished goods 72,300
Direct wages 17,200
Non-productive wages 800
Direct expenses 1,200
Factory overheads 8,300
Administrative overheads 3,200
Selling overheads 4,200

Problem.No.4
A factory produces a standard product. The following information is given to you from which you are required
to prepare a cost sheet for January 2022.
Raw material consumed Rs.91,000; Direct wages – Rs.29,000
Other direct expenses- Rs.11,000
Factory overheads 80% of direct wages.
Office overheads 10% of works cost.
Selling and distribution expenses Rs.2 per unit sold. Units produced and sold during the month 10,000. Also
find selling price per unit on the basis that profit mark up is uniformly made to yield a profit of 20% of the
selling price. There was no stock or work-in-progress either at the beginning or at the end of the period.

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Problem.No.5
Prepare a statement showing cost and profit from the following details. Clearly showing (a) Prime cost
(b) Works cost (c) Cost of production(d) Cost of sales and (e) Profit

Particulars Rs. Particulars Rs.

Direct wages 1,50,000 Direct materials 5,00,000
Power 2,500 Oil and water 2,500
Storekeeper’s wages 5,000 Transfer to general reserve 5,000
Factory rent 25,000 Foremen’s salary 12,500
Office rent 12,500 Factory lighting 7,500
Repairs: Office lighting 2,500
Factory plant 17,500 Depreciation
Office building 2,500 Factory plant 2,500
Goodwill written off 2,500 Office building 6,250
Consumables stores 12,500 Manager’s salary 25,000
Director’s fees 6,250 Office stationery 2,500
Telephone rent 625 Postage 1,250
Salesmen’s salaries 6,250 Travelling expenses 2,500
Advertising 6,250 Warehouse rent 2,500
Income tax 50,000 Dividend paid 10,000
Sales 9,47,500

Problem.No.6
The following data have been extracted from the books of Sunshine Industries ltd., for the year 2001:
Rs. Rs.
Opening Stock of Raw Material 25,000 Indirect Consumption of Material 500
Purchase of Raw Material 85,000 Salary –Office 2,500
Closing Stock of Raw Material 40,000 -Salesmen 2,000
Carriage Inward 5,000 Other Factory Expenses 5,700
Wages-Direct 75,000 Other Office Expenses 900
Wages-Indirect 10,000 Manager’s Remuneration 12,000
Rent and rates-Factory 5,000 Other Direct charges 15,000
-Office 500 Advertisement Expenses 2,000
Depreciation Travelling Expenses of Salesmen 1,100
-Plant & Machinery 1,500 Carriage and Freight Outward 1,000
-Office Furniture 100 Sales 2,50,000
Other selling expenses 1,000 Advance Income-tax paid 15,000
The manager has the overall charge of the company and his remuneration is to be allocated as Rs.4,000 to the
factory,Rs.2,000 to the office and Rs.6,000 to the selling operations. From the above particulars prepare a
statement showing (a) Prime cost;
(b) Factory cost;
(c) Cost of production;
(d) Cost of sales; and (e) Net profit.

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Problem.No.7
Following information has been obtained from the records of a manufacturing concern:
1st Sep.,2001 30th Sep.,2001
Rs. Rs.
Stock of Raw material 40,000 50,000
Stock of Finished goods 1,00,000 1,50,000
Stock of Work-in-progress 10,000 14,000
Rs. Rs.
Indirect labour 50,000 Administration expenses 1,00,000
Lubricants 10,000 Power 30,000
Insurance on plant 3,000 Direct labour 3,00,000
Purchase of raw materials 4,00,000 Depreciation on machinery 50,000
Sale commission 60,000 Factory rent 60,000
Salaries of salesmen 1,00,000 Property tax on factory building 11,000
Carriage outwards 20,000 Sales 12,00,000
Prepare a statement of cost and profit showing (a) cost of raw materials consumed;(b) prime cost;(c) total
manufacturing cost;(d) factory manufacturing cost;(e) cost of production;(f) cost of goods sold;(g) cost of sales;
and (h) profit.

Problem.No.8
Mr.Gopal furnishes the following data relating to the manufacturing of a standard product during the month of
April 2021
Raw materials consumed Rs.15,000
Direct wages Rs.9,000
Machine hours worked 900 hours
Machine hour rate Rs.5
Administrative overhead 20% on works cost
Selling overhead Re.0.50 per unit
Units produced: 17,100
Units sold at Rs.3 each: 16,000 at Rs.3 per unit.
You are required to prepare a cost sheet from the above showing:
(a) The cost per unit
(b) Profit per unit sold and profit for the period.

COST SHEET- TENDERS AND QUOTATIONS

Problem.No.9
The accounts of a machine manufacturing company disclose the following information for the six months
ending 31st dec.2021.
Rs.
Materials used 1,50,000
Productive wages 1,20,000
Factory overhead expenses 24,000
Establishment and general expenses 17,640
Prepare a cost sheet of the machines and calculate the price which the company should quote for the
manufacture of a machine requiring materials valued at Rs.1, 250 and expenditure in Productive wages of
Rs.750, so that the price may yield a profit of 20% on the selling price.

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Problem.No.10
Cost sheet –With sale price computation
A company has received an enquiry for the supply of 10,000 steel folding chairs. The cost are estimated as
follows:
Raw materials- 1,00,000 Kgs at Re.1 per Kg
Direct wages- 10000 hours at Rs.4 per hour
Variables overheads: Factory Rs.2.40 per labour hours
Selling and distribution Rs.16,000
Fixed overheads: Factory Rs.6,000
Selling and distribution Rs.14,000.
Prepare a statement showing the price to be fixed, which will result in a profit of 20% on the selling price.

Problem.No.11
The following details are available from a company’s books.
Rs.
Stock of materials on 1.1.99 12,800
Stock of finished goods 1.1.99 28,000
Purchases during the year 2,92,000
Production wages 1,98,800
Sales of finished goods 5,92,000
Stock of materials on 31.12.99 13,600
Stock of finished goods 30,000
Works overheads 43,736
Office and general expenses 35,547
The company is about to send a tender for a large plant. The costing department estimates that materials
required would cost Rs.20,000 and wages for making the plant would cost Rs.12,000.Tender is to be made
keeping net profit of 20% on selling price.
State what would be the amount of the tender, if based on the usual percentages.

Problem.No.12
BPL Television company finds that 2004, the cost to manufacture 200 T.V sets was Rs.6,16,000 which it sold at
Rs.4,000 each. Cost was made up of:
Rs.
Materials 2,00,000
Direct wages 3,00,000
Factory expenses 60,000
Office expenses 56,000
For 2005, it estimates that
Each television will require materials of the value of Rs.1,000 and wages Rs.1,500.
Absorb factory expenses on the basis of direct wages.
Absorb office expenses on the basis of Works cost.
Prepare a statement showing the profit it should make per unit if it enhances the price of television by Rs.80.

Problem.No.13
The following figures relate to the costing of a particular manufacture in respect of a certain type of sheet for a
period of three months.
Stock of raw materials 1st Jan 5,500
st
Stock of raw materials 31 march 3,500
Factory wages 83,000
Materials purchased 61,500
Sales 1,41,500
Indirect expenses 13,000
Completed stock on 1st Jan Nil
st
Completed stock on 31 march 29,000
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 The number of sheets manufactured during 3 months was 2200 and the price is to be quoted for 648
sheets, in order to realize the same percentage of profit for the period under review, assuming no alternative in
rate of wages and cost of material.
Prepare a statement of cost for the manufacture of 2200 sheets and quotations for 648 sheets.

Problem.No.14
A factory uses job costing. The following data are obtained from its books for the year ended 31st December
2014.

Direct materials Rs. 90,000

Direct wages Rs. 75,000
Factory overheads Rs. 45,000
Administration overheads Rs. 42,000
Selling & Distn. overheads Rs. 52,500
Profit Rs. 60,900
a) Prepare a cost sheet
b) In 2014, the factory received an order for a number of jobs. It is estimated that direct material required
will be Rs. 1,20,000 and direct labour will cost Rs.75,000. What should be the price for these jobs if
factory intends to earn the same rate of profit on sales assuming that the selling and distribution
overheads have gone up by 15%? The factory recovers factory overheads as a percentage of direct
wages and administration, selling and distribution overheads as a percentage of works cost, based on
cost rates prevailing in the previous year.

Problem.No.15
In respect of a factory the following particulars have been extracted for the year 2013:
Particulars
Cost of materials 6,00,000
Wages 5,00,000
Factory overheads 3,00,000
Administration charges 3,36,000
Selling charges 2,24,000
Distribution charges 1,40,000
Profit 4,20,000
A work order has to be executed in 2014 and the estimated expenses are:
Materials rs.8,000, wages Rs.5,000.
Assuming that in 2014, the rate of factory overheads has gone up by 20%, distribution charges have gone down
by 10% and selling and administration charges have gone each up by 15%, at what price should the product be
sold so as to earn the same rate of profit on the selling price as in 2013?
Factory overheads are based on wages and administration , selling and distribution overheads on factory cost.