X Manufacturing Company
Cost Sheet
Particulars Amount Amount
Direct Material Cost
Opening Stock of Materials
Add Purchases
Add Carriage Inwards
Add Custom Duty and Octroi
Dock Charges
Freight Inwazrd
Less: Closing Stock of Materials
Direct Wages
DirectExpenses / Chargeable Expenses
Prime Cost
Factory Overheads
Factory Rent, Rate, Insurances
Factory Lighting
Factory Supervision
Motive Power
Fuel and Oil
Greasse, Water etc
Steam
Welfare Expenses
Laboratory Expenses
Depreciation of Plant and Machinery
Depreciation of Factory Building
Repairs and Maintenance of Factory
Indirect Wages
Estimation Expenses
Technical Director's Fees
Haulage
Royalty
Loose tools W/off
Material Handling Charges
Factory Stationary
Work Manager's Salary
Works Clerical Staff's Salary
Supervisor's Salary
Service Department Expenses
Factory Cleaning
All other Factory Expenses
Less Scrap Sales
Add Opening Work in Progress
Less Closing work in Progress
Factory Cost
Office and Administration Overheads
Office rent rate and Taxes
Staff Salaries
Office Lighting
Office Cleaning
Printing and Stationary
Postage and Telegram
Office Conveyance
Depreciation of Office building and Furniture
Office Equipments
Office Repairs
Sundry Expenses
General Expenses
Legal Expenses
Audit Fees
Cost of Production
Add Opening Stock of Finished Goods
Less Closing Stock of Finished Goods
Cost of Finished Goods Sold
Selling and Distribution Overheads
Selling
Advertisement
Showroom Expenses
Travelling Expenses
Commission on Sales
Salaes Salaries
Discount Allowed
Bad Debts
Samples and Gifts
After Sales
Service Expenses
Demonstration Expenses
Packing Expenses
Loading Charges
Carriage on Sales
Rent of Warehouse
Insurance and lighting of warehouse
Expenses of Delivery Van
Salaries of Packing Department
Collection Charges
Cost of Catalogues
Cost of Mailing Literature
Cost of Tenders
Total Cost
Profit
Sales
X Manufacturing Company
Cost Sheet
Particulars Amount Amount
Direct Material Cost
Opening Stock of Materials 62,800.00
Add Purchases 185,000.00
Carriage on Purchases 7,150.00
Less: Closing Stock of Materials -48,000.00 206,950.00
Direct Wages 126,000.00
Prime Cost 332,950.00
Factory Overheads
Drawing Office Salary 6,500.00
Repairs of Plant 4,450.00
Rent 8,500.00
Depreciation on plants 6,500.00
Gas and Water 1,200.00
Managers Salary 7,500.00 34,650.00 3/4*10000
Factory Cost 367,600.00
Office and Administration Overheads
Counting House Salary 12,600.00
Rent 2,000.00
Depreciation on Furniture 300.00
Directors Feels 6,000.00
Gas and Water 400.00
Managers Salary 2,500.00 1/4*10000
General Expenses 3,400.00 27,200.00
Cost of Production 394,800.00
Cost of Finished Goods Sold
Selling and Distribution Overheads
Carriage outwards 4,300.00
Bad Debts w/Off 6,500.00
Travelling Expenses 2,100.00
Travelling Salaries 7,700.00 20,600.00
Total Cost 415,400.00
Profit 45,700.00 Balance Figure
Sales 461,100.00
Solution
A Material Consumed 206,950.00
B Prime Cost 332,950.00
C Factory Overheads and % on Wages
1. Factory Overheads 34,650.00
2. % on Wages 27.50%
D Factory Cost
E General Overhead and % on Factory Cost
1. General Overhead Office and Admin Overhe 47,800.00
2. % on Factory Cost 13.00%
F Total Cost 415,400.00
G Net Profit 45,700.00
X Manufacturing Company
Cost Sheet
Particulars Amount Amount
Direct Material Cost
Local raw material 1100000
Imports of Raw material 100000
Storage of raw material 50000
Excise duty 200000 1450000
Direct Wages 1000000
Prime Cost 2450000
Factory Overheads
Indirect Wages 200000
Fuel and Oil 150000
Tools Consumed 20000
Depreciation of Plant and Machinery 100000
Salaries of Works Personnel 100000 570000
Factory Cost 3020000
Office and Administration Overheads
Add Office Expenses 200000
Salary of M.D 60000
Salary of Joint M.D. 40000
Fees to Directors 20000 320000
Cost of Production 3340000
Selling and Distribution Overheads
Advertisement 160000
Selling' Expenses 180000
Sales Depot 120000
Packing Expenses 120000 580000
Total Cost 3920000
Add Profit (25% of Cost) 980000
Sales 4900000
Solution
Selling Price per unit(20,000 units) 245.00
Less Subsidy per unit -100.00
Price to be quoted 145.00
Local raw material cost 100000
add 10% more 100000
New cost 1100000
LET S.P BE 100
Less Profit(20%) -20
C.P 80
Profit as a % age of cost=20/80*100=25%
1995 1996
1 Raw Material 20000/1000 increase by 20%
20 per unit 20*1.2= 24
2 Labour Cost 12000/1000 increase by 10%
12 per unit 12*1.1 13.2
3 Factory Overheads
50% fixed 8000/2
4000 4000
4 Office Expenses
50% fixed 4000/2
2000 2000
50% Variable 2000/1000
2 Per unit 2 Per unit
5 Selling Expenses 1000/1000 Reduce by 20%
1 0.8
X Manufacturing Company
Cost Sheet
Particulars 1995 1996
No Of units 1000 1500
Direct Material Cost 20000 36000 1500*24
Direct Wages 12000 19800 1500*13.2
Prime Cost 32000 55800
Factory Overheads
Fixed 4000 4000
Variable 4000 6000 1500*4
Factory Cost 40000 65800
Office and Administration Overheads
Fixed 2000 2000
Variable 2000 3000 1500*2
Cost of Production
Selling and Distribution Overheads 1000 1200 1500*0.8
Total Cost 45000 72000
Profit 15000 24000
Sales 60000 96000
Let S.P be 100
Less Profit -25
Sales 75
Relationship of profit on cost= 25/75*100 = 1/3
X Manufacturing Company
Cost Sheet Homework
Particulars Amount Amount
Direct Material Cost
Opening Stock of Materials
Add Purchases
Add Carriage Inwards
Add Custom Duty and Octroi
Dock Charges
Freight Inwazrd
Less: Closing Stock of Materials
Direct Wages
DirectExpenses / Chargeable Expenses
Prime Cost
Factory Overheads
Factory Rent, Rate, Insurances
Factory Lighting
Factory Supervision
Motive Power
Fuel and Oil
Greasse, Water etc
Steam
Welfare Expenses
Laboratory Expenses
Depreciation of Plant and Machinery
Depreciation of Factory Building
Repairs and Maintenance of Factory
Indirect Wages
Estimation Expenses
Technical Director's Fees
Haulage
Royalty
Loose tools W/off
Material Handling Charges
Factory Stationary
Work Manager's Salary
Works Clerical Staff's Salary
Supervisor's Salary
Service Department Expenses
Factory Cleaning
All other Factory Expenses
Less Scrap Sales
Add Opening Work in Progress
Less Closing work in Progress
Factory Cost
Office and Administration Overheads
Office rent rate and Taxes
Staff Salaries
Office Lighting
Office Cleaning
Printing and Stationary
Postage and Telegram
Office Conveyance
Depreciation of Office building and Furniture
Office Equipments
Office Repairs
Sundry Expenses
General Expenses
Legal Expenses
Audit Fees
Cost of Production
Add Opening Stock of Finished Goods
Less Closing Stock of Finished Goods
Cost of Finished Goods Sold
Selling and Distribution Overheads
Selling
Advertisement
Showroom Expenses
Travelling Expenses
Commission on Sales
Salaes Salaries
Discount Allowed
Bad Debts
Samples and Gifts
After Sales
Service Expenses
Demonstration Expenses
Packing Expenses
Loading Charges
Carriage on Sales
Rent of Warehouse
Insurance and lighting of warehouse
Expenses of Delivery Van
Salaries of Packing Department
Collection Charges
Cost of Catalogues
Cost of Mailing Literature
Cost of Tenders
Total Cost
Profit
Sales
Homework
Sales 1000 units @30 30000
Less Variable Cost 20 -20000
Contribution 10000
Less Fixed Cost 5,000
Profit 5,000
1 P.V Ratio = Contribution / Sales *100 10/30*100
2 Breakeven Sales (Units) = Fixed Cost/ Contribution per unit
.= 5000/10=500 units
3 BES(RS) = Fixed Cost/P.V Ratio 5000/33.33%=15000
4 Breakeven Sales = BES(units)*S.P per unit 500*30=15000
5 Margin of Safety = Actual Sales - Breakeven Sales
30000-15000=15000
6 Margin of Safety Ratio = ((Actual Sales - Breakeven Sales)/Actual Sales)*100
15000/30000*1000=50%
7 MOS = Profit/P.V Ratio 5000/33.33% = 15000
Sales 20
Less Variable Cost 15
Contribution 5
Less Fixed Cost 20000
Profit
1 P.V Ratio = Contribution / Sales *100 25%
2 Breakeven Sales (Units) = Fixed Cost/ Contribution per unit
4000 units
3 BES(RS) = Fixed Cost/P.V Ratio 80000
4 New Sales 20% more of BES 96000
5 To Find Contribution PV ratio = 100*Contribution/Sales
25%=Contribution/96000
24000
6 Profit = Contribution-Fixed Cost 4000
Sales 500,000.00
Less Variable Cost
Materials 205,000.00
Labour 75,000.00
Variable Overhead 100,000.00
Total Cost 380,000.00
Contribution 120,000.00
Less Fixed Cost 60,000.00
Profit 60,000.00
1 P.V Ratio = Contribution / Sales *100 24%
2 BES(RS) = Fixed Cost/P.V Ratio 250,000.00
3 10% Increase in fixed cost 66,000.00
Old Fc 60,000.00
add 10% 6,000.00
New FC 66,000.00
4 BES(RS) = Fixed Cost/P.V Ratio 275,000.00
5 10% Increase in Variable cost
Old VC 380,000.00
add 10% 38,000.00
New VC 418,000.00
6 To calculate new PV ratio
Sales 500,000.00
Less Variable Cost(new) 418,000.00
Contribution 82,000.00
PV ratio 16.4%
7 BES(RS) = Fixed Cost/P.V Ratio 365853.66
NEW
Sales 20,000 100%
Less Var cost 16,000
Contribution 4,000 5,000 0.2
Less Fixed Cost 4,000 4,000
Profit 0 1,000
Break Even Sales 20,000
P.V.RATIO=CONTR/SALES*100
4,000/20,00*100 20%
New sales=contribution/p.v.ratio
5,000/20% 25,000
1) Selling price reduced by 10%
Old S.p 20
Less Reduced(10%) -2
New S.P 18
NEW BREAK EVEN SALES
Variable cost per unit
No of units in case of old break even sales=20,000/20=1,000 units
Variable cost per unit=16,000/1,000=16 per unit
Contribution per unit=18-16=2
NEW S.P 18
Less OLD VAR COST 16 Variable cost remains unchanged since nothing is specified in the qu
CONTRIBUTION 2
P.V.RATIO CONTR/SALES*100
2/18*100=11.11%
NEW BREAK EVEN SALES=FIXED COST/P.V.RATIO
4,000/11.11% 36,000
thing is specified in the question
Q.24-13
MARGIN OF SAFETY @20%----PROFIT=4,00,000
P.V.RATIO-----40%
MOS=PROFIT/P.V.RATIO
MOS=10,00,000
20%-------10,00,0000
100%--------?
ACTUAL SALES=10,00,000*100/20=50,00,000
CONTRIBUTION=40%*50,00,000=20,00,000 current sales=50 lakhs
Fixed cost=16 Lakhs
CONTRIBUTION 2,000,000
Less Fixed cost 1,600,000 (bal figure)
Profit 400,000
Q 24-23
P.V.RATIO=CHANGE IN PROFITS/CHANGE IN SALES*100
(4,000-2,000)/(15,000-10,000)*100 40%
PERIOD 1 PERIOD 2
Sales 10,000 15,000
Less Var Cost 6,000 9,000
Contribution 40% 4,000 6,000
Less Fixed cost 2,000 2,000 (bal fig)
Profit 2,000 4,000
BES(RS)=FIXED COST/P.V.RATIO
2,000/40% 5,000
SALES TO EARN A PROFIT OF RS 3,000
CONTRIBUTION=FIXED COST + PROFIT
2,000+3,000 5,000
P.V.RATIO=40% ------As claculated above
Contribution----40%------5,000
100%---------?
sales=5,000*100/40=12,500
PROFIT WHEN SALES ARE 8,000
SALES 8,000
Contribution 40% of sales 3,200
Less Fixed cost -2,000
Profit 1,200
Illustration no 7 UNITS =100
HOME MARKET
total cost per unit
Sales 15500 155
Less Variable cost
Materials 4,000 40
wages 3,600 36
Factory overheads 2,000 20
Selling overheads 1,600 16
Total variable cost 11,200 112
CONTRIBUTION 4,300 43
Less Fixed Cost
Factory overheads 1,200
Selling overheads 1,000
Admin overheads 1,800
Total fixed cost 4,000
PROFIT 300
FOREIGN MARKET OFFER
SELLING PRICE PER UNIT 125
Less Total variable cost per unit (112)
CONTRIBUTION 13
TOTAL PROFITS EARNED IF FOREIGN OFFER IS ACCEPTED
HOME MARKETS FOREIGN MARKETS TOTAL
UNITS SOLD 100 400 500
Contribution per unit 43 13
Total contribution 4,300 5,200 9,500
Less Fixed Cost -4,000
PROFIT 5,500
Marginal Costing Statement
X Y Z
Selling price per unit 25 30 35
Less Variable Cost
Raw Material 11.25 16.25 21.25
Labour 2.5 2.5 2.5
Other Variable cost 1.5 2.25 3.55
Total Variable Cost 15.25 21 27.3
Contribution/unit 9.75 9 7.7
Rank 1 2 3
Std Machine time 39 20 28
Contribution/MINUTE
Contribution per unit/Machine t 0.25 0.45 0.275
Ranks 3 1 2
Marginal Costing Statement
P Q R
Selling price per unit 25 30 35
Less Variable Cost
Raw Material 11 16.25 21
Labour 2.5 2.5 2.5
Other Variable cost 1.5 2.25 3.5
Total Variable Cost 15 21 27
Contribution/unit 10 9 8
Rank 3 2 1
Std Machine time 40 21 25
Contribution/MINUTE
Contribution per unit/Machine t 0.25 0.428571 0.32
Ranks 3 1 2
Calculation of fixed overheads
Production * Fixed Total Cost
Product Planned units Overheads per unit
A 3000 15 45000
B 4000 18 72000
C 4000 18 72000
D 3000 24 72000
E 2400 30 72000
Grand Total FC 333000
Statement to find profit for the production plan
Product A B C D E Grand Total
Selling price per unit 70 92 95 110 180
Less variable cost
Direct Materials 20 24 32 40 60
Direct Labours 10 12 12 16 20
Variable Overheads
(50% * direct Labour Cost) 5 6 6 8 10
Total Variable Cost 35 42 50 64 90
Contribution per unit 35 50 45 46 90
Production Planned units 3000 4000 4000 3000 2400
Total Contribution 105000 200000 180000 138000 216000 839000
Less Fixed Cost 333000
Profit 506000
W.N. 2 To calculate direct labour hours per unit
Direct labours*rate per hour = Direct Labour cost
Direct labour hours = Direct Labour cost/Rate per hour
Product A B C D E
Direct Labour cost 10 12 12 16 20
rate per hour 15 15 15 15 15
Direct labour hours
per unt 0.67 0.80 0.80 1.07 1.33
W.N.3 To calculate contribution per hour
Product A B C D E
Contribution per unit 35 50 45 46 90
Direct labour hours
per unit 0.67 0.80 0.80 1.07 1.33
Contribution per hour=
Contribution per unit/Labour hours per unit
52.5 62.5 56.25 43.125 67.5
Ranks 2 3 5 1
W.N.4 To Decide the best product mix in 14000 hours
Ranks Product Units Hours per unit Total Hours
1 E Max 4000 1.33 5,320.00
2 B Max 6000 0.80 4,800.00
3 C Balancing F 3363 0.80 2,690.00 Balancing figure 3362*0.8 2689.6
4 A Min 1000 0.66 660.00 3363*0.8 2690.4
5 D Min 500 1.06 530.00
To calculate the profit for best product mix
Product A B C D E Total
Units 1000 6000 3362 500 4000
Contribution per unit 35 50 45 46 90
Total Contribution 35000 300000 151290 23000 360000 869290
Less Fixed Cost 333000
Profit 536290
Grand Total
Hence, 3362 is correct
Tea Coffee Cardmom
S.P per KG 25 50 300
Less Total Variable Cost 17.5 16.25 187.5
Contribution per kg 7.5 33.75 112.5
Yield per hectare 2500 625 125
Contribution per hectare = Contribution per kg * Yield per hectare
18750 21093.75 14062.5
Rank 2 1 3
To decide the best product mix in 500 hectars
Rank Product Min Land used Max Land used
1 Coffee 60 100
2 Tea 240 320
3 Cardmom 20 60
320 hectares 480 hectares
To calculate the profit for best product mix
Product Tea Coffee Cardmom Total
Land used 320 100 60
Contribution per hectare 18750 21093.75 14062.5
Total contribution 6000000 2109375 843750 8953125
Less Fixed Cost 3500000
Profit 5453125
