PUNE INSTITUTE OF BUSINESS MANAGEMENT

MANAGERIAL ACCOUNTING
Topic: Preparation of Cost Sheet
Compiled by: Dr Manoj Rao

Format of Cost Sheet for a Manufacturing Entity

Problem No-1 (CQ)
The following data relates to the manufacture of a standard product during the
month of April:
Particulars
Raw materials Rs 1,80,000
Direct wages Rs 90,000
Machine hours worked (hours) 10,000
Machine hour rate (per hour) Rs 8
Administration overheads (general) Rs 35,000
Selling overheads (per unit) Rs 5
Units produced 4,000
Units sold 3,600
Selling price per unit Rs 125
Prepare a cost sheet showing: (i) Cost per unit (ii) Profit for the month
Problem No-2(CQ)
The following information has been obtained from the records of ABC
Corporation for the period from June 1 to June 30:
Particulars June 1 June 30
Cost of raw materials 60,000 50,000
Cost of work-in-process 12,000 15,000
Cost of stock of finished goods 90,000 1,10,000
Purchase of raw materials during June 2020 4,80,000
Wages paid 2,40,000
Factory overheads 1,00,000
Administration overheads (related to 50,000
production)
Selling & distribution overheads 25,000
Sales 10,00,000
Prepare a statement giving the following information:
(a) Raw materials consumed;
(b) Prime cost;
(c) Factory cost;
(d) Cost of goods sold; and
(e) Net profit.
Problem No-3(CQ)
The following are the costing records for the year 2022 of a manufacturer:
Production 10,000 units;
Cost of Raw Materials ₹2,00,000;
Labour Cost ₹1,20,000;
Factory Overheads ₹ 80,000;
Office Overheads ₹40,000;
Selling Expenses ₹10,000,
Rate of Profit 25% on the Selling Price.
The manufacturer decided to produce 15,000 units in 2023. It is estimated that
the cost of raw materials will increase by 20%, the labour cost will increase by
10%, 50% of the overhead charges are fixed and the other 50% are variable. The
selling expenses per unit will be reduced by 20%. The rate of profit will remain
the same.
Prepare a Cost Statement for the year 2023 showing the total profit and selling
price per unit.

Problem No-4(HQ)
From the following information of X Ltd., prepare a statement of cost for July
2023.
Purchases of Raw Materials 1,20,000
Carriage Inward 20,000
Opening Stock of Partly Finished Goods 10,000
Opening Stock of Raw Materials 30,000
Opening Sock of Finished Goods 20,000
Direct Charges 10,000
Salary of Salesmen 40,000
Manufacturing Wages 1,80,000
Factory Lighting and Heating 5,000
Office Salaries 50,000
Haulage 5,000
Closing Stock of Raw Materials 20,000
Closing Stock of Work in Progress 10,000
Closing Stock of Finished Goods 30,000
Sale of Scrap 5,000
Printing and Stationery 10,000
Cost of Factory Supervision 10,000
Advertisement 20,000
Loose Tools written off 5,000
Depreciation of Plant and machine 15,000
Carriage Outward 10,000
Director's Fees 15,000
Works Manager's Salary 25,000
Rent of Warehouse (Finished Goods) 10,000
Travelling Agent's Salaries 20,000
Sale Promotion Expenses 10,000
Office Gas, Water and Electricity 10,000
Bad Debt 4,000
Bank Charges 6,000
Sales 7,00,000

Problem No-5(HQ)
The Directors of a manufacturing business require a Statement showing the
production results of the business for the month of March. The Cost A/c reveals
the following information:
Stock on hand on 1st March
Raw Materials 25,000
Finished Goods 17,360
Stock on hand on 31st March
Raw Materials 26,250
Finished Goods 15,750
Purchase of Raw Materials 21,900
Work in Progress on 1st March 8,220
Work in Progress on 31st March 9,100
Sale of Finished goods 72,310
Direct Wages. 17,150
Non Productive Wages 830
Works Expenses 8,430
Office and Administrative Expenses 3,160
Selling and Distribution Expenses 4,210
You are required to prepare statement cost.

Problem No-6(HQ)
The books of a manufacturing Co. present the following data for the month of
April, 2022:
Direct labour cost Rs. 17,500 being 175% of works overhead. Cost of goods sold
excluding administrative expenses is Rs. 56,000.
Inventory accounts showed the following opening and closing balances:
April 1 April 30
Raw materials 8,000 10,600
Work in Progress 10,500 14,500
Finished goods 17,600 19,000
Other data are:
Selling expenses 3,500
General and administration expenses 2,500
Sales for the month 75,000
You are required to:
(a) Compute the value of raw material purchased
(b) Prepare a cost statement showing the various elements of cost and also the
profit earned.
Problem No-7(CQ)
From the following particulars, you are required to prepare monthly cost sheet of
Arya Industries:
Opening Inventories:
Raw materials 12,00,000
Work-in-process 18,00,000
Finished goods (10,000 units) 9,60,000
Closing Inventories:
Raw materials 14,00,000
Work-in-process 16,04,000
Finished goods ?
Raw materials purchased 1,44,00,000
GST paid on raw materials purchased 7,20,000
(Input Tax Credit available)
Wages paid to production workers 36,64,000
Expenses paid for utilities 1,45,600
Office and administration expenses 26,52,000
paid
Travelling allowance paid to office 1,21,000
staffs
Selling expenses 6,46,000
Machine hours worked 21,600 hours
Machine hour rate Rs 8.00 per hour
Units sold 1,60,000
Units produced 1,94,000
Desired profit 15% on sales

Problem No-8(CQ)
The following figures were extracted from the Trial Balance of a company as on
31st December, 2021
Particulars Debit Amount (₹) Credit Amount (₹)
Inventories:
Raw Material 1,40,000
Work in Progress 2,00,000
Finished Goods 80,000
Office Appliances 17,400
Plant and Machinery 4,60,500
Buildings 2,00,000
Sales 7,68,000
 Sales Returns 14,000
Material Purchased 3,20,000
Freight on materials 16,000
Purchase Returns 4,800
Direct Labour 1,60,000
Indirect Labour 18,000
Factory Supervision 10,000
Factory repairs and 14,000
upkeep
Heat, Light & Power 65,000
Rates & Taxes 6,300
Miscellaneous Factory 18,700
Expenses
Sales Commission 33,600
Sales Travelling 11,000
Sales Promotion 22,500
Distribution Department 18,000
Salaries and Wages
Office Salaries 8,600
Interest on borrowed 2,000
funds

Further details are given as follows:

Closing inventories are Material ₹1,80,000, Work in Progress ₹1,92,000 and
Finished Goods ₹1,15,000.
Accrued expenses are Direct Labour ₹8,000, Indirect Labour ₹1,200 and Interest
₹2,000.
Depreciation should be provided as 5% on Office Appliances, 10% on Machinery
and 4% on Buildings.
Heat, light and power are to be distributed in the ratio of 8: 1: 1 among factory,
office and distribution respectively.
Rates & Taxes apply 2/3rd to the factory and 1/3rd to office.
Depreciation on building to be distributed in the ratio of 8: 1: 1 among factory,
office and distribution respectively.
Prepare a Cost Sheet showing all important components and also a condensed
Profit & Loss Account for the year.