BBA VISION Coaching

Online Class
Management Accounting / Cost Accounting
Cost Concept and Classification(Cost Sheet)
General Statement of cost sheet(Formate
Particulars Tk Tk
Opening raws material ***
(1) Purchase of raws material ***
Available raw material for use ***
Closing raw material (***)
Raw material used ***
(+) Direct Labor / Any Direct Expenses ***
Prime Cost ***
(+) Factory Overhead:
Factory/Machinery-related Exp ***
Heat/Light/Power ***
Any Works Expense ***
Depreciation on machinery ***
Any Indirect Expenses ***
(-) Sales of Scarp (***)
Total Factory O/H ***
Work / Factory / Manufacturing cost ***
(+) Opening work in process ***
cost of process during this year ***
(-) Closing work in process (***)
Cost of production/ cost of goods manufactured ***
(+) Opening Finished goods ***
cost of goods available for sale ***
(-) Closing Finished goods (***)
Cost of goods sold ***
(+) Operating Exp:
1. Selling Marketing Exp ***
2. Office/Administrative Exp ***
Total Cost ***
(+) Profit ***
Selling Price ***
 Income Statement
Particulars TK TK
Sales ***
(-) cost of goods sold (***)
Gross Profit ***
(-) Operating Expenses:
Selling/Distribution Exp ***
Administrative Exp ***
(***)
Net Profit ***

Necessary Problem With Solve

Problem – 01 [N.U – 2013]
Moon Star Company provided the following data for May, 2012: -
Sales Tk. 72,000; marketing expenses Tk. 3,600; administrative expenses Tk. 72,000; other expenses Tk.
360, purchase Tk. 36,000; factory expenses Tk. 10,000; direct labor Tk. 15,000.
Inventories Beginning (Tk.) Ending (Tk.)
Finished goods 7,000 10,200
Work-in-process 8,000 13,000
Materials 8,000 8,500
Required: Cost of goods manufactured.

Solution
Moon Star Company
Cost Sheet
For the year ended 31 May, 2012
Particulars Tk. Tk.
Raw materials consumed:
Opening raw materials 8,000
Add: Purchase 36,000
44,000
Less: Closing Raw materials 8,500
Raw Material used 35,000
Add: Direct Labor 15,000
Prime Cost 50,000
Add: Factory Overhead 10,000
Cost of manufacturing 60,500
Add: Opening work-in-Progress 8,000
68,500
Less: Closing Work-in-Progress 15,000
Cost of good manufactured 53,500
Problem – 02 [N.U (Hons) 2015]
The following information is obtained from the cost record of ABC manufacturing company: -
Taka
Total manufacturing cost 3,00,000
Closing inventories of finished goods 42,000
Cost of finished goods 2,80,000
Work-in-progress (closing) 20,000
Factory overhead was applied 30% of total manufacturing cost and direct labour cost was 15% of factory
overhead. Administrative and selling expenses Tk. 45,000. Total sales during the period was Tk. 3,10,000.
Prepare a cost sheet from the above information.

Solution
Cost Sheet
Particular Tk. Tk.
Direct material 1,96,500
Direct labour (90,000 × 15%) 1,35,000
Prime Cost 2,10,000
Add: Factory OH (3,00,000 × 30%) 90,000
Manufacturing Cost 3,00,000
Less: Ending Inventory of WIP 20,000
Cost of Finish goods 2,80,000
Less: Closing finish goods 42,000
Cost of goods sold 2,38,000

Problem – 03 [N.U.B. Com (Hons.) 2004]

The following particulars have been extracted from the books of Alfa Ltd, as on 31 st December, 2011:
Particulars Tk.
Purchase of raw materials 1,32,000
Direct wages 1,05,000
Stock of raw materials (1.1.2011) 1,50,000
Stock of raw materials (31.12.2011) 1,83,000
Stock of work-in-progress (1.1.2011) 56,000
Stock of work-in-progress (31.12.2011) 70,000
Stock of finished goods (1.1.2011) 1,08,000
Stock of finished goods (31.12.2011) 62,000
Sales 4,22,000
Factory rent and power 30,000
Depreciation of plant and machinery 7,000
Direct expenses 3,000
Sundry factory expenses 20,000
Sales man salaries and commission 13,000
Office rent 5,000
Sundry office expenses 13,000
Advertising expenses 7,000
 Carriage outward 5,000
You are required to prepare a statement showing:
(a) Raw materials consumed (b) Prime cost (c) Total manufacturing cost (d) Net profit and loss.

Solution
Alfa Ltd.
Statement of cost
For the year ended 31 December, 2011
Particulars Tk. Tk. Tk.
Stock of raw materials opening 1,50,000
Add: Purchase of raw materials 1,32,000
Cost of raw materials available for use 2,82,000
Less: Stock of raw materials closing 1,83,000
Raw materials consumed / used (a) 99,000
Direct wages 1,05,000
Direct expenses 3,000
Prime cost (b) 2,07,000
Factory over head:
Factory rent and power 30,000
Depreciation of plant and machinery: 7,000
Sundry factory expenses 20,000
57,000
Total manufacturing costs (C) 2,64,000
Add: Stock of work-in-progress opening 56,000
3,20,000
Less: Stock of work-in-progress closing 70,000
Cost of goods manufactured 2,50,000
Add: Opening stock of finished goods 1,08,000
Cost of goods available for sale 3,58,000
Less: Closing stock of finished goods 62,000
Cost of goods sold 2,96,000
Administrative expenses:
Office rent 5,000
Sundry office expenses 13,000 18,000
Marketing expenses:
Sales man salaries and commission 13,000
Advertising expenses 7,000
Carriage outward 5,000 25,000 43,000
Cost of sales 3,39,000
Net profits (d) 83,000
Sales 4,22,000

Problem – 04 [N.U. B. Com (Hons) 2002]

The following information is obtained from the books of account of manufacturing concern for the month
of March, 2001
 Particular Tk.
Raw materials(1-3-2001)…………………………………….............. 7,500
Raw Materials (31-3-2001) 3,500
Raw materials purchased……………………………………………….. 29,000
Work-in-progress (1-3-2001) 5,300
Finished goods (1-3-2001)……………………………………………… 15,600
Work-in-progress (31-3-2001) 7,400
Finished goods (31-3-2001)…………………………………………….. 4,600
Direct wages: 1,500 hours @ Tk. 2.00 per hour
Direct expenses……………………………………………………………… 6,500
Factory supplies 4,000
Indirect labor (Factory)………………………………………………….. 8,200
Miscellaneous works expenses 7,200
Administrative Expenses:
Fixed 6,000
Variable 10% of prime cost
Selling expenses:
Fixed 2,500
Variable 3% of cost of goods sold
Profit- 15% of sales.
Prepare a statement showing the following:
(i) Prime cost; (ii) Works cost; (iii) Cost of goods manufactured; (iv) Total cost; (v) Sales

Solution
A Manufacturing Concern; Cost Sheet
for the month of March, 2001
Particulars Tk. Tk.
Raw materials - opening 7,500
Add: Raw materials purchased 29,000
Raw materials available for use 36,500
Less: Raw materials-closing 3,500
Raw materials used 33,000
Direct labour cost (1,500 hours @ Tk. 2.00 per hour) 3,000
Direct expenses …………………………………………………………… 6,500
Prime Cost (i) 42,500
Add: Factory Overhead
(i) Factory supplies ……………………………………………………. 4,000
(ii) Indirect labour (factory) 8,200
(iii) Miscellaneous works expense 7,200
19,400
Total works cost/manufacturing cost (ii) 61,900
Add: Work-in-progress (opening) 5,300
Less: Work-in-progress (closing) 7,400 (2,100)
Cost of goods manufactured: (iii) 59,800
Add: Finished goods (opening) 15,600
 Less: Finished goods (closing) 4,600 11,000
Cost of goods sold 70,800
Add: Commercial overhead
(a) Administrative expenses
(i) Fixed cost 6,000 10,250
(ii) Variable (10% of Prime cost) 4,250
(b) Selling & distribution expenses
(i) Fixed cost 2,500 6,040 16,290
(ii) Variable cost (5% of Cost of goods sold) 3,540 87,090
Cost of sales/Total cost (iv)
15 15 15,369
Add: Profit (15% on sales i.e. or on cost)
100 − 15 85
Sales (v) 1,02,459

Problem – 05
The following information has been taken from the records of Fiz & Son Ltd. for the last year :
Tk.
Selling expenses 1,50,000
Raw materials inventory, January – 1 ……………………………………………………….. 90,000
Raw materials inventory, December – 31 60,000
Utilities, factory ………………………………………………………………………………………… 36,000
Direct labour Cost 1,50,000
Depreciation, factory ……………………………………………………………………………….. 1,62,000
Purchase of raw materials 7,50,000
Sales ……………………………………………………………………………………………………… 25,00,000
Insurance, factory 40,000
Supplies, factory …………………………………………………………………………………….. 15,000
Administrative expenses 2,60,000
Indirect labour ………………………………………………………………………………………. 87,000
Maintenance factory 3,00,000
Work in progress inventory, January – 1 …………………………………………………. 1,80,000
Work in progress inventory, December – 31 1,00,000
Finished goods inventory, January – 1 ……………………………………………………. 2,60,000
Finished goods inventory, December – 31 2,10,000
Management wants these data organized in a better format so that financial statements can be prepared
for the year.
Required:
1. Purchase a schedule of cost of goods sold
2. Prepare an income statement

Solution
Fiz & Son Ltd.
Statement of cost of goods sold
For the year ended 31st December
Account Titles Tk. Tk.
 Raw materials – Opening 90,000
Add: Raw materials purchased 7,50,000
Raw materials available for use 8,40,000
Less: Raw materials closing 60,000
Raw materials confirmed used 7,80,000
Direct labour cost 1,50,000
Prime cost 9,30,000
Add: Factory overhead:
Utilities – factory 36,000
Depreciation, factory 1,62,000
Insurance, factory 40,000
Supplies, factory 15,000
Indirect labour 87,000
Maintenance factory 3,00,000
6,40,000
Total manufacturing cost 15,70,000
Add: WIP – Opening 1,80,000
Less: WIP – Closing 1,00,000 80,000

Cost of goods manufactured 16,50,000

Add: FG – Opening 2,60,000
Less: FG – Closing 2,10,000 50,000
Cost of goods sold 17,00,000
Income Statements
For the year ended 31st December
Accounts Titles Tk. Tk.
Sales 25,00,000
Less: Cost of goods sold 17,00,000
Gross profit 8,00,000
Less: Commercial expenses
(i) Selling expenses 1,50,000
(ii) Adm. Expenses 2,60,000
4,10,000
Operating profit / Net profit 3,90,000

Problem – 06 [N.U. M. Com (final) Acct. 1995]

The Rico Watch Co. Ltd. manufactures different types of clocks. The sales revenue for the year Tk. 9,45,000
The cost related to production during the year and the inventories in different dates were as follows:

Start of the period End of the period

Work-in-process Tk. 75,000 Tk. 60,000
Finished goods 35,000 54,000
Direct material purchased during the year were Tk. 2,05,000. Material used in production Tk. 1,76,000.
Direct labour cost Tk. 2,50,000 and factory overhead costs Tk. 2,37,500. Selling expenses are Tk. 55,000 and
general administration expenses Tk. 1,17,000.
Prepare a statement showing (i) Cost of goods manufactured; (11) Cost of goods available for sale; (iii)
Cost of goods sold; (iv) Cost of sales and (v) Profit or Loss.

Solution
Note:
Raw materials purchased during the year and Raw materials used is given.
So, Raw materials (closing) = Raw material purchased – Raw materials used
= Tk. 2,05,000 – Tk. 2,76,000 = Tk. 29,000
The Rico Watch Co. Ltd.; Cost Sheet
for the period ........
Particulars Tk. Tk.
Raw materials purchased 2,05,000
Less: Raw materials (closing) 29,000
Raw materials used 1,76,000
Direct Labour Cost 2,50,000
Prime Cost 4,26,000
Add: Factory overhead: 2,37,500
Total Manufacturing Cost 6,63,500
Add: Work-in-Progress (Opening) 75,000
Less: Work-in-Progress (Closing) 60,000 15,000
Cost of goods manufactured 6,78,500
Add: Finished goods (Opening) 35,000
Less: Finished goods (Closing) 54,000 (19,000)
Cost of goods sold 6,59,500
Add: Commercial expenses:
(a) General administration expenses 1,17,000
(b) Selling expense 55,000 1,72,000
Total cost 8,31,500
Profit (Balancing figure) 1,13,500
Sales 9,45,000

Problem – 07 [N.U.BBS (Hons.) 2005]

Samad and company manufactures shoes. The following information are obtained from the financial books
of the company at the end of a year:
Tk.
Direct material used 54,000
Direct wages 50,240
Works expenses 15,800
Administrative 5,560
Selling and distributive expenses 5,100
Stock of finished goods 21,500
Sales (10,000 pairs of shoes) 1,40,000
Dividend received 2,500
Loss on sale of investment 1,200
 Interest paid on debenture 600
The net profit as shown by the cost accounts for the year was Tk. 31,822. Works expenses were charged at
30% on direct wages. Administrative expenses at 5% on works cost and selling and distributive expenses
at Tk. 0.50 per pair of shoes sold. In the cost accounts the closing stock of finished goods was valued at Tk.
22,100.
Prepare:
A statement showing cost of production

Solution
Samad and Company
Cost statement
for the year ended ........
Particulars Tk. Tk.
Direct material used 54,000
Direct wages 50,240
Prime cost 1,04,240
Factory overhead / work expenses applied (50,240 × 30%) 15,072
Cost of production / works cost 1,19,312

Problem –08 [N.U. – 2014]

A manufacturing company produces bicycles. The company had 260 units of opening inventory costing Tk.
700 per unit in 2014.
During the year 2014 the company sold 2150 bicycles at a gross profit of 20% on sale. Cost of material per
unit was TK. 420 Direct labour cost per bicycle was 40 hours at Tk. 4 per hour. Factory overhead was charged
at Tk. 5 per direct labour hour. Administrative and selling expenses amounted to Tk. 1,20,000. The finished
inventory at close was 110 units.
Prepare:
(i) Statements of cost of goods sold: (ii) Income statement.

Solution
Workings:
1. Calculate of Production is units:
Unit sold 2,150 Units
Add: Finished (Closing) 110 Units
Goods available for sale 2,260 Units
Less: Finished goods (opening) 260 Units
Number of units produced 2,000 Units
Cost of closing stock = Closing stock in units × Cost per units
= 110 Units × Tk. 780 = Tk. 85,800.
Req.-(i)
A Manufacturing Company
Cost Sheet
For the year ended 31 December 2014
Account Titles Tk. Tk.
Raw Materials used (2,000 × 420) 8,40,000
 Labour cost (2,000 × 40 × 4) 3,20,000
Prime cost 11,60,000
Add: Factory overhand (2,000 × 40 × 5) 4,00,000
Work cost/Cost of production 15,60,000
Add: Opening Finished goods (260 × 700) 1,82,000
17,42,000
Less: Closing Finished goods 85,800
Cost of goods sold 16,56,200
Total production cost
Cost of production per unit =
Total production units
16,56,200
=
2,000
= Tk. 828.1.

Req.-(ii)
A Manufacturing Company
Income statement
For the year ended 31 December, 2014
Account Titles Tk.
Sales (2,150 × 975) 20,96,250
Less: Cost of goods sold 16,56,200
Grass profit 4,40,050
Less: Commercial overhead:
Administrative & selling exp. 1,20,000
Net Profit 3,20,050
Selling price per unit = Cost price + 20% profit on sale
= Cost price + 25% profit on cost
= 780 + (780 × 25%)
= 780 + 195 = Tk. 975.

Problem – 09
Following data are collected from the records of a manufacturing concern
Tk.
Raw materials used 3,200
Work-in-process (1 – 3 – 13) 5,200
Work-in-process (31 – 3 – 13) 6,500
Finished goods (1 – 3 – 13) 13,700
Finished goods (31 – 3 – 13) 8,070
Direct wages 1,400 hours @ Tk. 2 per hour 2,800
Direct expenses 7,200
Factory indirect materials 4,200
Indirect labour (factory) 9,100
Factory miscellaneous expenses 7,300
Administrative Expenses :
Fixed 6,000
 Variable 10% of Prime cost --
Selling Expenses :
Fixed 3,000
Variable 5% of cost of goods manufactured --
Sales 58,912
Prepare a cost of goods manufactured sold statement and an income statement

Solution
A Manufacturing Concern
Statement of cost of goods manufactured and sold
Accounts Titles Tk. Tk.
Raw materials used 3,200
Direct wages 2,800
Direct expenses 7,200
Prime cost 13,200
Add: Factory overhead:
(i) Factory Indirect materials 4,200
(ii) Indirect labour 9,100
(iii) Factory Miscellaneous expenses 7,300
20,600
Total works cost / Total manufacture cost 33,800
Add: Work-in-process beginning 5,200
Less: Work-in-process closing 6,500 (1,300)
Works Cost / Cost of Production 32,500
Add: Fished goods opening 13,700
Less: Fished goods closing 8,070
5,630
Cost of goods sold 38,130
A Manufacturing Concern
Income Statement
For the period of -------
Accounts Titles Tk. Tk. Tk.
Sales 58,912
Less: Cost of goods sold 38,130
Gross profit 20,782
Less: Operating expenses / Commercial expenses
(a) Administrative Expenses :
(i) Fixed 6,000
(ii) Variable 10% of Prime cost 1,320 7,320
(b) Selling Expenses :
(i) Fixed 3,000
(ii) Variable 5% of cost of production 1,625 4,625 11,945
Operating income / Net income 8,837
Problem – 10
From the following particulars of Zakir Ltd. prepare a statement showing (a) Works cost; (b) Cost of goods
manufactured; (c) Cost of goods sold; (d) Total cost of sales and; (e) Profit.
Opening Tk. Closing Tk.
Stock on hand :
Raw materials 7,000 8,600
Work-in-process 12,300 16,000
Finished goods 11,500 9,700
Factory supplies 2,400 3,000
Packing materials 2,000 1,800
Purchase :
Raw materials 60,000
Factory supplies 6,000
Packing materials 4,000
Direct labour 45,300
Factory expenses 9,600
Deprecation of machinery 5,400
Office expenses 3,500
Distribution charges 3,000
Selling Expenses 4,200
Managing director’s remuneration 7,500
Sales manager’s remuneration 6,000
Sales 1,60,000

Solution
Zakir Ltd.
Statement of cost
For the period ***………
Particulars Tk. Tk. Tk.
Cost of raw materials used :
Opening stock of raw materials 7,000
Purchases of raw materials 60,000
67,000
Less : Closing stock of raw materials 8,600 58,400
Direct labour 45,300
Prime Cost 1,03,700
Factory overhead :
Opening factory supplies 2,400
Add: Purchases 6,000
8,400
Less: Closing 3,000 5,400
Factory expenses 9,600
Deprecation of machinery 5,400 20,400
Works Cost 1,24,100
Add: Opening work-in-progress 12,300
 1,36,400
Less : Closing work-in-progress 16,000
Cost of goods manufactured 1,20,400
Add: Opening stock of finished goods 11,500
1,31,900
Less: Closing stock of finished goods 9,700
Cost of goods sold 1,22,200
Commercial expenses :
Administrative expenses :
Offer expenses 3,500
Managing director’s remuneration 7,500 11,000
Selling distribution expenses :
Selling expenses 4,200
Distribution charges 3,000
Sales manager's remuneration 6,000
Packing materials opening 2,000
Add: Purchase 4,000
6,000
Less: Closing 1,800 4,200 17,400
Total cost of sales (B) 1,50,600
Profit (A – B) 9,400
Sales (A) 1,60,000

Problem -11 [N.U. B. Com (Pass) 2001]

From the following information, prepare a Cost Sheet showing the items:
(a) Cost of raw materials used; (b) Prime cost; (c) Works cost; (d) Total cost; (e) Net Profit/Loss; (f)
Percentage of works overhead to Direct Wages and (g) Percentage of office and administration overhead
to works cost:
Particulars Tk.
Purchase of raw materials 66,000
Stock of raw materials (1-1-2000) 45,000
Stock of raw materials (31-12-2000) 48,000
Stock of work-in-progress (1-1-2000) 28,000
Stock of work-in-progress (31-12-2000) 32,000
Indirect wages 2,750
Direct expenses 5,500
Sundry office expenses 9,500
Salesman's salary and commission 6,500
Carriage outwards 2,500
Direct wages 53,000
Stock of finished goods (1-1-2000) 52,000
Stock of finished goods (31-12-2000) 55,000
Sales 2,28,000
Factory rent and power 15,000
Depreciation of Machinery 3,500
 Depreciation of office furniture 1,200
Sundry factory expenses 10,000
Repairs to Factory Building 5,100
Office rent 4,200
Advertisement 3,500
Manger's salary (3/5th factory, 2/5th office) 8,500
Electric charges (3/4th Factory, 1/4th office) 3,200

Solution
Company; Cost sheet for the period of ...
Particular Tk. Tk. Tk.
Raw materials (opening) 45,000
Add: Purchase of raw materials 66,000
Raw materials available for use 1,11,000
Less: Raw materials (closing) 48,000
Cost of raw materials used (a) 63,000
Direct labour cost 53,000
Other direct expenses 5,500
Prime Cost (b) 1,21,500
Add: Factory overhead/Factory on cost:
(i) Indirect wages 2,750
(ii) Factory rent power 15,000
(iii) Depreciation on Machinery 3,500
(iv) Sundry factory expenses 10,000
(v) Repairs to factory building 5,100
(vi) Manager's salary (Tk. 8,500 × ¾) 5,100
(vii) Electric charges (Tk. 8,200 × ¾) 2,400 43,850
Total manufacturing cost (c) 1,65,350
Add: Work-in-progress (opening) 28,000
1,93,350
Less: Work-in-progress (closing) 32,850
Works cost/Cost of production 1,60,500
Add: Finished goods (opening) 52,000
2,12,500
Less: Finished goods (closing) 55,000
Cost of goods sold 1,57,500
Add: Commercial overhead
(a) Office & administrative overhead:
(i) Manager's Salary (TK. 8,500 × 2⁄5 ) 3,400
(ii) Electric charges (Tk. 3,200 × ¼) 800
(iii) Office rent 4,200
(iv) Deprecation on office furniture 1,200
(v) Sundry office expenses 9,500 19,100
(b) Selling & distribution overhead
6,500
 (i) Salesmen's salary and commission 2,500
(ii) Carriage outwards 3,500
(iii) Advertisement 12,500 31,600
1,89,150
Total cost/Cost of sales (d) 38,850
Profit (Balancing figure) 2,28,000
Sales

Problem-12: Cost Sheet- Manufactures Company

From the following particulars relating to the production and sales for the year ended 31st December
2011. Prepare a cost sheet showing there in the (i) Prime cost, (ii) Works cost, (iii) Cost of production, (iv)
Cost of sales and (v) Profit of sales.

Stock as on 1.1.2011
(a) Raw materials 2,50,000
(b) Work-in-progress:
At prime cost 3,00,000
Add: Manufacturing expenses 60,000
3,60,000
(c) Finished goods (at cost) 14,40,000
Raw materials Purchased 20,00,000
Freight on raw materials 1,00,000
Machine hour rate 30
Machine hours worked: 48,000 hours
Chargable expenses 5,00,000
Factory wages for direct labour 27,00,000
Administrative expenses 10,00,000
Selling expenses 5,40,000
Distribution expenses 3,60,000
Sale proceeds of finished goods (30,000 90,00,000
units)
Total units produced 32,000 units
Stock on 31st December, 2011:
(a) Raw materials 4,50,000
(b) Work-in-progress
At prime cost 4,50,000
Mfg. expenses 90,000
5,40,000
(c) Finished goods at cost (10,000 units) ?
Apply LIFO principle in finished goods valuation
Solutions:
-------- Company
Statement of Cost Sheet
 for the year ended 31st December 2011
[Output: 32,000 units]
Particulars TK Tk
Raw materials consumed:
Opening stock 2,50,000
Add: Net Purchase:
Purchase 20,00,000
Freight 1,00,000 21,00,000
Materials available for use 23,50,000
Less: Closing stock (4,50,000)
Prime Cost 19,00,000
Factory wages 27,00,000
Chargable expenses 5,00,000
Prime Cost before Adjustment of W/P 51,00,000
Adjustment of prime cost of work-in-progrss: 3,00,000
Add: work-in-progress (opening) (4,50,000) (1,50,000)
Less: Work-in-progress (closing)
Prime Cost (after adjustment) 49,50,000
Add: Factory overhead (48,000 hours @ Tk. 30 each) 14,40,000
Manufacturing Cost (before adjustment of W/P) 63,90,000
Add: works-in-progress (opening) 60,000
Less: Works-in-progress (closing) 90,000 (30,000)
Cost of production/Works Cost for finished stock (for 63,60,000
32,000 units)
Add: Finished goods (opening) 14,40,000
Cost of goods available for sale 78,00,000
Less: Finished goods (closing) (Note - 3) 18,37,500
Cost of goods sold 59,62,500
Add: Commercial overhead:
(a) Administrative overhead 10,00,000
(b) Selling & distribution overhead (5,40,000+ 3,60,000) 9,00,000 19,00,000
Cost of sales/Total cost 78,62,500
Profit (Balancing figure) 11,37,500
Sales 90,00,000

Notes: 1. Opening finished stock in units= Sales + closing stock

= 30,000+ 10,000 - 32,000
= 8,000 units
Total production cost 63,60,000
2. Cost of production per unit = = = Tk. 198.75
Production units 32,000
3. Valuation of closing stock: (Under LIFO method)
8,000 Units cost = Tk. 14,40,000
2,000 Units @ Tk. 198.75 = 3,97,500
Tk. 18,37,500
Problem – 13
The following information’s are available from that records of co. for the six month’s ended 30 June, 1999:
Taka
Raw materials used 18,000
Direct labour 11,000
Indirect labour 5,000
Factory Supplies 1,000
Salaries 9,000
Other factory expenses 2,500
Miscellaneous selling expense 2,000
Sundry administrative expense 1,500
Value of fixed assets at on 1 January, 1999 ***………… Tk. 4,00,000 depreciation @ 5% per annum to be
provided 75% of the depreciation relates to manufacturing. 15% to administrative and 14& to selling
distribution 2/3rd of the salary is for office and the balance foe sales. Total units produced sold during the
six month’s is 5,000. Sales per units are Taka 16.
Required:
(a) Prepare a statement showing the total cost of sales and profit earned during the period.
(b) Find out the unit selling price for the next six months assuming that manufacturing cost has increased
by ***………… administrative, selling and distribution expense have decreased by 15% and the
percentage of profit and units produced and sold remains the same as before.

Solution
Req. – (a):
Statement of Cost
For the six months, ended 30 June, 1999
Output 5,000 units
Particulars Taka Taka Taka
Raw materials used 18,000
Direct labour 11,000
Prime cost 20,000
Add: Factory overhead:
Indirect labour 5,000
Factory Supplies 1,000
Other factory expenses 2,500
Depreciation (10,000 × 75%) 7,500
16,000
Manufacture cost 45,000
Add: Commercial expenses:
Administrative expenses:
Salaries (9,000 × 2/3) 6,000
Depreciation (10,000 × 15%) 1,500
Sundry administrative expense 1,500
9,000
Selling distribution expenses:
Salaries (9,000 × 1/3) 3,000
 Depreciation (10,000 × 10%) 1,000
Miscellaneous selling expense 2,000
6,000
15,000
Total Cost 60,000
Add: Profit 20,000
Sales (5,000 units × Tk. 16) 80,000
Workings – 1:
6
Depreciation for 6 months = (4,00,000 × 5%) ×
12
= Tk. 10,000
Workings – 2:
Profit
Percentage of profit on Total Cost = × 100
Total cost
20,000
= × 100
60,000
= 33.33%
Req. – (b):
Statement for unit’s sales price
Particulars Taka
Manufacturing cost {45,000 + (45,000 × 10%)} 49,500
Administrative expenses {9,000 – (9,000 × 15%)} 7,650
Selling and distribution expenses {6,000 – (6,000 × 15%)} 5,100
Total Cost 62,250
Add: Profit (62,250 × 33,33%) 20,750
Sales price 83,000
Sales value 83,000
Unit selling price = =
Units sold 5,000 units
16.60

Problem –14 [N.U.BBS (Hons.) 2011]

The following particulars have been extracted from the books of Rajib Ltd. for the year ended 31st
December 2012: -
Taka
Purchase of raw materials 2,61,000
Sales 7,40,000
Direct labour 95,000
Stock on 1 January, 2012:
Raw materials 43,000
Work-in-process……………………………………………………………………………. 15,500
Finished goods 38,000
Purchase return……………………………………………………………………………… 4,000
Sales returns 7,000
Factory supplies:
Purchase 6,000
Opening stock………………………………………………………………………………. 2,000
Closing stock 3,000
 Indirect labour………………………………………………………………………………. 34,000
Office expenses 75,000
Sales expenses 90,000
Heat, light and power …………………………………………………………………….. 25,000
Depreciation:
Factory building 13,000
Machinery 27,000
Property taxes (75% to factory, 10% in office and 15% to sales) 6,000
Repairs and maintenance 10,000
Raw materials used 2,65,000
Insurance (50% factory, 25% office and 25% sales) 12,000
Closing stack of finished goods (31 December, 2012) 52,000
Cost of goods sold 4,75,000
Prepare:
a) An income statement;
b) A statement of cost of goods sold.

Solution
(a)
Rajib Ltd.
Income Statement
Particulars Tk. Tk. Tk.
Sales 7,40,000
(-) return 7,000
Net sales 7,33,000
Less: Cost of goods sold 4,75,000
Gross profit 2,58,000
Less: Operating expenses
(a) Office and Administrative exp. 75,000
Office expenses 600
Property taxes insurance (12,000 × 25%) 1,500
Repair and maintenance 10,000 87,100
(b) Selling and distribution exp.
Sales expense 90,000
Property taxes (6,000 × 15%) 900
Insurance exp. (12,000 × 25%) 1,500 92,400
Total operating exp. 1,79,500
Net profit 78,500
(b)
Rajib Ltd.
Cost of Goods Sold Statement
Particulars Tk. Tk. Tk.
Raw materials opening 43,000
Add: Raw materials purloins 2,61,000
(-) return 4,000
 2,57,000
Raw materials available for uses 3,00,000
(-) Raw materials closing (B/F) 35,000
Raw materials used 2,65,000
Direct labour 95,000
Prime cost 3,60,000
Add: Factory overhead:
Supplies-opening 2,000
(+) Supplies purchase 6,000
8,000
(-) Supplies-Closing 3,000
5,000
Indirect labour 34,000
Heal, light and power 25,000
Depreciation:
Factory Building 13,000
Machinery 27,000 40,000
Property taxes (6,000 × 75%) 4,500
Insurance (12,000 x 30%) 6,000
Total factory overhead 1,14,500
Total work cost/Factory cost 4,74,500
Add: WIP opening 15,500
Cost of Goods Manufactured 4,90,000
Add: Opening-Finished goods 38,000
Less: Closing-Finished goods 52,000
Cost of goods sold 4,76,000

Problem – 15 Nu-2007
The following figures are available from the books of M/s Zakir enterprise for the year ended 31 st December
2008 :
Taka
Materials inventory on 1-1-2008 1,000
Materials inventory on 31-12-2008 ……………………………………………………………… 2,000
Materials purchased during 2008 10,000
Wages ……………………………………………………………………………………………………………. 7,500
Factory Overhead 4,500
Administrative overhead …………………………………………………………………………….. 4,250
Selling Overhead …………………………………………………………………………………………… 5,250
Profit for the year 6,090
In the year 2009 the factor receive an order for a job which will requires materials Tk. 1,500 and wages Tk.
750 . The management of the enterprise intends to earn a profit 10% higher than the percentages of profit
earned in 2008 and assume the factory Overhead has gone up by 15% and selling and administrative
overhead has gone down by 20% in 2009. Further assume the factory overhead is recovered as a percentage
of wages and selling and administrative overhead as a percentage of works Cost.
You are required to:
(i) Prepare a cost show 2008
(ii) Ascertains the sales price of the job order received in 2009.

Solution
MS. Zakir Enterprise
Cost Sheet
For the ended 31 Dec. 2008
Elements of Cost Tk. Tk.
Beginning inventory of material 1,000
Add: Purchase of year 10,000
Materials daring the year 11,000
Less: Ending inventory of material 2,000
Material used 9,000
Direct Wages 7,500
Prime Cost 16,500
Factory overhead 4,500
Works Cost / Production Cost / Cost of goods manufactured 21,000
Add: Operating expense :
Administrative Overhead 4,200
Selling Overhead 5,250
9,450
Total cost 30,450
Add: Profit for the year 6,090
Sales 36,540
Workings:
Factory overhead 4,500
1. Percentage of factory overhead on direct wages = × 100 = × 100 = 60%
Wages 7,500
Administrative overhead
2. Percentage of administrative overhead on direct works cost = × 100
Works cost
4,200
= × 100 = 20%
21,000
Selling overhead
3. Percentage of administrative overhead on direct works cost = × 100
Works cost
5,200
= × 100 = 25%
21,000
Profit 6,090
4. Percentage of profit on cost = × 100 = × 100 = 20%
Sales 30,450
Tender Cost Sheet for 2009
Elements of Cost Tk. Tk.
Direct Materials 1,500.00
Direct Wages 1,000.00
Prime Cost 2,500.00
Factory overhead (60% + 15% of 60%) = 65% of 1,000 690.00
Works Cost / Cost of Production 3.190.00
Add: Operating Expense :
Administrative Overhead (20% – 15% of 20%) = 15% of 3,190.00 478.50
Selling Overhead (25% – 20% of 25%) = 25% – 5% = 20% of 3,100.00 638.00
 1,116.50
Total cost 4,306.50
Add: Profit for the year (20% + 10% of 20%) = 22% of 4,306.50 947.45
Sales 5,253.95

Problem – 16 [B.Com. (Pass) R.U–1984]

Lina Ltd. is a company that manufactures to order. The cost Accountant estimates that its working for the
coming year will be as follows:
Tk.
Materials 12,500
Labour 18,000
Factory overhead 4,500
Office overhead 7,000
Sales 48,000
Profit 6,000
On the basis of the above mentioned particulars, what price would be quoted for a job will need Tk. 3,500
of material and Tk. 4,400 of labour. Factory overhead is to be charged in proportion to labour and office
overhead factory cost.

Solution
Lina Ltd.
Statement of cost
For the year ended ...
Elements of cost Tk.
Material 12,500
Add: Labour 18,000
Prime cost 30,500
Add: Factory overhead 4,500
Production cost/Factory cost 35,000
Office overhead 7,000
Total cost 42,000
Profit 6,000
Sales 48,000
Workings:
4,500
1. Percentage factory overhead on labour = × 100
18,000
= 25%
7,000
2. Percentage office overhead on factory costs = × 100
35,000
= 20%
6,000
3. Percentage profit on total cost = × 100
42,000
= 14.286%
Statement of ***………… Tender price
Elements of cost Tk.
 Material 3,500
Add: Labour 4,400
Prime cost 7,900
Add: Factory overhead (25% on Tk. 4,400) 1,100
Factory cost / Cost of goods manufactured 9,000
Office overhead (20% on Tk. 9,000) 1,800
Total cost 10,800
Add: Profit (14.286% on Tk. 10,800) 1,543
Sales 12,343

Problem –17
From the following particulars you are required to prepare a statement showing – (i) The cost of materials
used (ii) The work cost, (iii) Total cost (iv) Total percentage of stock overhead in productive wages and (v)
The percentage of office and administrative overhead in works cost :

Stock of Overhead goods 31 Dec. 1995 2,00,000

Stock of Raw materials 31 Dec. 1995 1,00,000
Purchase of Raw materials …………………. ……………………… 6,50,000
Productive wages 4,00,000
Sales of finished goods 16,00,000
Stock of finished goods 30 June 1996 1,25,000
Stock of Raw materials 30 June 1996 1,50,000
Works Overhead 2,50,000
Office and administrative overhead 1,25,000
The company is about to send a tender for a plant. The *** ………. would cost Tk. 1,00,000 and the wages
would cost Tk. 60,000 The tender is to be made at a net profit of 20% on the selling price
Show that the amount of the tender would be if *** ………
[Percentage that you compared from the data given above]

Solution
……. Company
Statement of cost
Elements of cost Amounted
Tk.
Opening stock of raw materials 1,00,000
Add: Purchase of Materials 6,50,000
Materials available for used 7,50,000
Less: Closing stock of raw materials 1,50,000
Cost of materials used (i) 6,00,000
Add: Productive wages 4,00,000
Prime cost 10,00,000
Add: Works overhead 2,50,000
Works cost (ii) 12,50,000
Add: Office and administrative overhead 1,25,000
 Total cost (iii) 13,75,000
2,50,000
(iv) Percentage of stock overhead in productive wages = × 100
4,00,000
= 62.5%
1,25,000
(v) Percentage of office and administrative overhead in works cost = × 100
12,50,000
= 10%
Statement of Tender Price
Details Taka
Raw materials 1,00,000
Wages 60,000
Prime cost 1,60,000
Works overhead (60,000 × 62.5%) 37,500
Works cost 1,97,500
Add: Office and administrative overhead (1,97,500 × 10%) 19,750
Total Cost 2,17,250
Add: Profit (20% of on sales or 25% on cost) 54,313
Sales 2,71,563

Problem – 18 [N.U. BBS (Hons.) 2010]

The following figures have been obtained from the records of a company for the year ended 31-12-2011:
Tk.
Direct materials 1,70,000
Direct wages 1,00,000
Works overhead 60,000
Administrative overhead 67,200
Selling overhead 44,800
Distribution overhead 28,000
Profit 1,05,000
A work order has been executed in 2012 and the following expenses have been incurred: –
Tk.
Direct materials 2,000
Direct wages 1,000
Assuming that in 2011 the rate of factory overhead has gone up by 20%. Distribution overhead have gone
down by 10% and selling and administration overhead have gone up by 12.5%, at what price should the
product be sold so as to earn the same rate of profit on the selling price?
Statement of Cost
for the year ended Dec. 31, 2012
Elements of Cost Details (Tk.) Amount (Tk.)
Direct materials 1,70,000
Direct Wages 1,00,000
Prime cost 2,70,000
Add: Works overhead 60,000
Works cost/Factory cost 3,30,000
Add: Administrative cost 67,200
Cost of Production 3,97,200
 Add: Selling overhead 44,800
Distribution overhead 28,000
72,800
Add: Profit 4,70,000
Sales 1,05,000
5,75,000
Working Notes:
60,000
1. % of Works o/h on direct wages = × 100
1,00,000
= 60%
2. % of Administrative overhead to on works cost:
60,000
= × 100
1,00,000
= 20.36%
Selling o/h
3. % of Selling overhead on works cost = × 100
Works cost
44,800
= × 100
3,30,000
= 13.58%
28,000
4. % of Distribution o/h on works cost = × 100
3,30,000
= 8.48%
Profit
5. % of Profit on sales = × 100
Works cost
1,05,000
= × 100
5,75,000
= 18.26%
18.26
Or, = × 100 = 22.34% on cost
81.74
Estimated cost statement/Tender cost sheet
for the year 2012
Elements of Cost Details Amount (Tk.)
Direct materials 2,000
Direct Wages 1,000
Prime cost 3,000
Add: Works overhead (60% + 20% of 60%) = 72% (1,000 × 72%) 720
Works cost 3,720
Add: Administrative overhead (20.36 + 12.5% of 20.36%) = (3,720 × 22.91%) 852
22.9% 4,572
Cost of Production (3,720 × 15.28%) 568
Add: Selling overhead (13.58% + 12.5% of 13.58%) = 15.28% (3,720 × 7.63%) 284
Distribution overhead (8.48 – 10% of 8.48) 5,424
Total cost 1,212
Add: Profit (18.26% on sales i.e. 22.34% on cost) 6,636
Sales / Tender price

Problem – 19 [N.U.BBS (Hons.) 2009]

From the following information of Ureka Manufacturing Company Ltd. prepare a statement of cost on
December 31. 2011:
31.12.2010 31.12.2011
Tk. Tk.
Stock of raw material 20,000 15,000
Stock of work-in-progress 10,000 8,000
Stock-of finished goods (200 units)……………………………… 24,000
Purchase of raw materials 2,50,000
Direct wages ………………………………………………………………… 1,20,500
Factory over head 60,000
Administrative overhead (20% of factory overhead)
Selling and distribution overhead Tk. 3.50 per unit. Closing stock of finished goods 300 units and sales 3,400
units.
What is the selling price per unit when profit 25% on sales?

Solution
Ureka Manufacturing Company Ltd.
Statement of cost
For the year ended December 31, 2011
Particulars Tk. Tk.
Raw material (1.12.10) 20,000
Purchase of raw material 2,50,000
Raw material available for use 2,70,000
Less: Closing stock of raw materials (31.12.11) 25,000
Raw material used 2,55,000
Direct wages 1,20,500
Prime cost 3,75,500
Add: Factory overhead 60,000
Total manufacturing cost 4,35,500
Add: Opening stock of work-in-process 10,000
4,45,500
Less: Closing stock of work-in-process 8,000
Costs of goods manufactured 4,37,500
Add: Opening stock of finished goods 24,000
Costs of goods available for sale 4,61,500
Less: Closing stock of finished goods 37,500
Cost of goods sold 4,24,000
Add: Commercial expense:
Administrative expenses (60,000 × 20%) 12,000
Selling and marketing expenses (3,400 × 3.50) 11,900
Cost of sales 4,47,900
1
Add:Profit (25 on sales or 33 % of cost) 1,49,285
3
Sales 5,97,185
Sales 5,97,185
Selling price per unit = = = Tk. 175.64
Units sold 3,400 units
Working: Notes:
(a) Number of units produced:
Sales 3,400 units
Add: Closing finished goods 300 "
3,700 "
Less: Opening finished goods 200 "
Units produced 3,500 "
Costs of goods manufactured Tk. 4,37,500
(b) Cost per unit = = = Tk. 125
Units produced 3,500
(c) Value of closing stock of finished goods: = Closing units × cost per unit
= (300 Tk. 125) = Tk. 375000
(d) Calculation of profit of cost:
Profit 25 1
Profit 25% on sales: That is, = × 100 = × 100 = 33 %
Cost 75 2

Problem – 20
From the following particulars you are required to prepare a statement showing – (i) The cost of materials
used (ii) The work cost, (iii) Total cost (iv) The percentage of works on cost to productive wages and (v)
The percentage of general on cost to works cost:
Stock of finish goods 31, 12, 2003 56,000
Stock of materials 31, 12, 2003 25,600
Purchase of Raw materials ………………............ 5,84,000
Productive wages 3,97,600
Sales of finished goods 11,84,000
Stock of finished goods 31, 12, 2004 60,000
Stock of Raw materials 31, 12, 2004 27,200
Works Overhead charges 87,472
Office and general overhead 71,048
The company is about to send a tender to supply a machine. The costing department estimate that the
materials required would cost Tk. 40,000 and the wages to workman for making the machine would cost
Tk. 24,000. The tender is to be made at a net profit of 20% on the selling price.
Show what the amount of the tender would on the basis of on the above percentages.

Solution
……. Company
Statement of cost
Elements of cost Amounted
Tk.
Opening stock of raw materials 25,600
Add: Purchase 5,84,000
Raw materials available for use 6,09,600
Less: Closing stock of raw materials 27,200
Cost of materials used (a) 5,82,400
Add: Productive wages 3,97,600
Prime cost 9,80,000
 Add: Works overhead charges / works on cost 87,472
Factory cost / works cost (b) 10,67,472
Add: Office and general expenses 71,048
Total cost (c) 11,38,520
𝑊𝑜𝑟𝑘𝑠 𝑜𝑛 𝑐𝑜𝑠𝑡
(iv) Percentage of works on cost to productive wages = × 100
𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑒 𝑤𝑎𝑔𝑒𝑠
87,472
= × 100
3,97,600
= 22%
𝐺𝑒𝑛𝑒𝑟𝑎𝑙 𝑐𝑜𝑠𝑡
(v) Percentage of general on cost to works cost = × 100
𝑊𝑜𝑟𝑘𝑠 𝑐𝑜𝑠𝑡
71,048
= × 100
10,67,472
= 6.656%
Statement of Tender Price
Details Taka
Materials cost 40,000
Direct wages 24,000
Prime cost 64,000
Works overhead charges (24,000 × 22%) 5,280
Works cost 69,280
Add: Office and general expenses (69,280 × 6.656%) 4,611.28
Total Cost 73,891.28
Add: Profit (20% of on sales i.e. 25% on cost) 18,472.82
Tender cost 92,364.10
20 1
Note: 20% profit on sales = =
100 5
1
Percentage of profit on cost = × 100
5−1
1
= × 100 = 25%
4

Problem – 21 [BBS (Hons) 2006]

Form the cost records of Sheba Manufacturing company prepare a cost sheet and determine the selling
price per unit if goods are sold at a profit of 20% on sales:
Units Tk.
Raw material purchased 15,000 1,80,000
Raw material 1st January, 2011………………………………………………….. 1,500 15,000
Raw material 31st December, 2011 2,000 24,000
Work in progress 1st January, 2011……………………………………………. 1,225 30,000
Work in progress 31st December, 2011 1,000 20,000
Finished goods 1st January, 2011……………………………………………….. 1,500 33,000
Finished goods 31st December, 2011 500
Conversion cost Tk. 1,00,450 (60% constitutes direct wages). Normal loss is 5% of material consumed which
realized at tk. 2 per unit. Administrative expenses are 25% of factory expenses. Selling expenses 5% of sales.

Solution
Sheba Manufacturing Company
Statement of Cost
 For the year ended 31st December, 2011
Particulars Tk. Tk.
Raw materials Consumed:
Opening stock of raw materials 15,000
Purchases 1,80,000
1,95,000
Less: Closing stocks of raw materials 24,000 1,71,000
Direct wages (W-1) 60,270
Prime cost 2,31,270
Add: Factory overhead (W-1) 40,180
Works cost Total manufacturing cost 2,71,450
Add: Opening work in progress 30,000
3,01,450
Less: Closing work in progress 20,000
2,81,450
Less: Sale of scrap 1,450
Cost of goods manufactured 2,80,000
Add: Opening stock of finished goods 33,000
3,13,000
Less: Closing stock of finished goods (W-6) 10,000
Cost of goods sold 3,03,000
Administrative expenses (25% of 40,180) 10,045
Selling expense (W-7) 20,870 30,915
Cost of sales / Total cost 3,33,915
Profit (W-8) 83,479
Sales 4,17,394
Workings Notes:
1. Calculation Direct wages and overhead:
Conversion cost Tk. 1,00,00,450
Direct wages = 1,00,450 × 60% = 60,270
Overhead = 1,00,450 × 40% = 40,180
2. Materials consumed units Units
Opening stock of raw materials 1,500
Purchase of raw materials 15,000
16,500
Less: Closing stock of raw materials 2,000
Raw materials consumed 14,500
.ᱸ. Normal loss = 14,500 × 5% = 275 units
3. Value of scrap = Normal loss units × Scrap value per unit = 725 × 2 = 1,450
4. Production unit Units
Raw materials consumed 14,500
Less: Normal loss 725
13,775
Add: Opening work in progress 1,225
15,000
 Less: Closing work in progress 1,000
Production units 14,000
Cost of goods manufactured
5. Cost per unit =
Production units
2,80,000
= = 20 Tk.
1,400
6. Value of closing stock = Closing stock of units × cost per unit
= 500 × 20 = Tk. 10,000
7. Calculation of Selling expenses:
Profit 20% and selling expenses 5% on sales.
Let sales = 100, then profit Tk. 20 and selling expense Tk. 5
Total cost before selling expenses = 100 – (20 + 5) = 75
5 5
So, Selling expenses = (3,03,000 + 10,045) × = 3,13,045 × = 20,870
75 75
20
8. Calculation of Profit = 3,13,045 × = 83,479
75
or, (3,33,915 × 25%) = Tk. 83,479

Problem – 22 [D.U. M. Com. (Final) 2005]

Star line company has given a route of 20 miles long to run a bus. The bus costs the company a sum of Tk.
5,00,000. It has been insured at an annual premium of 4% of the cost price and the annual tax amount to
Tk. 5,000. Garage rate is Tk. 600 per month. Annual repairs will be Tk. 6,000 and the bus is likely to last for
5 years.
The driver's salary will be Tk. 1,500 p.m. and the conductor’s wages Tk. 1,00,00 p.m. in addition to 10% of
taking as commission to be shared by the driver and the conductor. Cost of stationery and other expenses
will be Tk. 500 p.m. manager's salary if Tk. 3,000 p.m. petrol and oil will be Tk. 250 per 100 miles. The will 3
round trips per day carrying on an average 40 passengers on each trips. Assuming 15 % profit on taking.
Calculate the bus fate to be charged from each passenger. The bus will run on an average 25 days in a
month.

Solution
Star line Company
Services Cost Statement
Details Cost per
month (Tk.)
Fixed cost:
Insurance – (5,00,000 × 4%) = 20,000 ÷ 12 1,667
Taxes (5,000 ÷ 12). 417
Garage rent 600
Drivers salary 1,500
Conductors wages 1,000
Managers salary 3,000
Depreciation (5,00,000 ÷ 5) = (1,00,000 ÷ 12) 8,333
Total fixed expenses (a) 16,517
Variable exp.
Repairs (6,000 ÷ 12) 500
Stationary and others exp. 500
 Petrol and oil (250/100 × 3,000) 7,500
Drivers commission (10% × 33,356) 3,336
Total variable exp. (b) 11,836
Profit 15% on taking i.e. 15% of 33,356 (c) 5,003
Total taking (a + b + c) 33,356
Fare charge per passenger mile (33,356 ÷ 1,20,000) 0.27797
Workings:
1. Total effective passenger miles per month:
Round trip × Distance × Days × Passenger = (3 × 20 × 25 × 40 × 2). = 1,20,000
2. Calculation of commission and profits:
Let, x be the total takings per month.
Drivers communion is 10% of x = 0.10x
Profit charge is 15% of a = 0.15x
Total expenses without commission = (16,517 + 500+ 500 + 7500) = 25,017.
.ᱸ. X – (0.10x + 0.15x) = 25,017.
 0.75x = 25,017.
 x = 33,356. Total taking per month=Tk. 33,356

Problem – 23 [N.U. (Hons) 2015]

The following data relate to XYZ Ltd.:
Details Taka
Inventory of finished goods-01-01-2014 72,800
Inventory of raw materials-01-01-2014………………………………………………………. 33,280
Purchase of raw materials………………………………………………………………………… 7,59,200
Productive wages 5,16,880
Sales of finished goods……………………………………………………………………………… 15,39,200
Inventory of finished goods-31-12-2014 78,000
Inventory of raw materials-31-12-2014……………………………………………………… 35,360
Work manager's salary 50,000
Indirect wages…………………………………………………………………………………………….. 30,000
Fuel 15,000
Depreciation of plant……………………………………………………………………………….. 15,000
Indirect raw materials 10,000
Tools used in production……………………………………………………………………………. 9,220
Administrative expenses 30,161
Salary to the managing director 40,000
Required:
(1) Prepare a cost sheet for the year.
(2) Compute total cost of a plant and find out the price of a tender for another plant to be submitted. It
is estimated that the cost of raw materials required for the fender will be Tk. 52,000 and direct wages
Tk. 31,200. The tender is to be made at a profit of 20% on selling price.

Solution
Req.- (1):
XYZ Ltd.
Cost sheet
For the year ended 31 Dec. 2014
Elements Tk. Tk.
Opening inventory of raw materials 33,280
Add: Purchase 7,59,200
Less: Closing inventory of raw materials 7,92,480
Materials used 35,360 7,57,120
Add: Productive wages 5,16,880
Prime cost 12,74,000
Add: Factory OH
(i) Work manager's salary 50,000
(ii) Indirect wages 30,000
(iii) Fuel 15,000
(iv) Depreciation of plant 15,000
(v) Indirect raw materials 10,000
(vi) Tools used in production 9,220
1,29,220
Factory Cost 14,03,220
Add: Opening stock of finished goods 72,800
14,76,020
Less: Closing stock of finished goods 78,000
Cost of goods sold 13,98,020
Add: Commercial OH
(i) Administrative Exp. 30,161
(ii) Salary to the managing director 40,000
70,161
Total cost 14,68,181
Add: Profit 61,019
Sales 15,39,200
Req.- (ii) Workings :
1. % of Factory OH on direct wages –
𝐹𝑎𝑐𝑡𝑜𝑟𝑦 𝑂𝐻
= × 100
𝐷𝑖𝑟𝑒𝑐𝑡 𝑊𝑎𝑔𝑒𝑠
1,29,220
= × 100 = 25%
5,16,880
2. % of Administrative OH on Factory.
𝐴𝑑𝑚𝑖𝑛𝑖𝑠𝑡𝑟𝑎𝑡𝑖𝑣𝑒 𝑂𝐻
Cost = × 100
𝐹𝑎𝑐𝑡𝑜𝑟𝑦 𝐶𝑜𝑠𝑡
70,161
= × 100 = 5%
14,03,220
Tender Price
Particulars Tk. Tk.
Raw Materials 52,000
Add: Direct Wages 31,200
Prime Cost 83,200
 Add: Factory OH (31,200 × 25%) 7,800
Factory Cost 91,000
Add: Administration OH (91,000 × 5%) 4,550
Total cost 95,550
Add: Profit (20% on selling Price i.e. 25% on cost) 23,887.50
Tender Price 1,19,437.50

Problem – 24 [D.U. B. Com. (Hons). 1978, 87; N.U. B. Com (Hons.) 1996]
From the following information, prepare cost of goods sold statement and income statement for the year
ended 31st December, 1995:
Tk.
Ledger balance on 1st January, 1995:
Materials and supplies 40,700
Work-in-progress (1,200 units)………………………………………………………… 4,070
Finished goods (2,800 units) 9,800
Transactions for the year:
Purchased materials and supplies 24,800
Paid factory overhead…………………………………………………………………….. 20,100
Paid marketing expenses 25,050
Paid administrative expenses 19,700
Material issued:
Direct 29,800
Indirect………………………………………………………………………………………. 3,950
Depreciation:
Production 950
Marketing 46
Administrative………………………………………………………………………….. 44
Sales (20,700 units) 1,44,900
Cash payment (accounts payable Tk. 75,000 and payroll Tk. 21,800) 96,800
Distribution of payroll earned:
Direct labour…………………………………………………………………………………. 18,600
Indirect labour 4,400
Factory overhead applied 27,450
20,400 units are transferred to finished goods. Cost of goods sold figures is calculated on the FIFO basis.
1,200 units are in work-in-progress on December 31,1995.

Solution
Workings:
1. Calculation of closing materials & supplied:
Opening materials and supplies Tk. 40,700
Add: Purchase materials supplied 24,800
65,500
Less: Direct materials used Tk. 29,800
Indirect materials used 3,950
33,750
 Tk. 31,750
2. Valuation of Closing work-in-process:
Total inputted cost
Cost of W/P per unit =
Total inputted units
Tk. 79,920 Tk. 79,920
= = = Tk. 3.70
20,400 + 1,200 21,600
So, values of WIP – Closing = 1,200 Units @ Tk. 3.70 = Tk. 4,440.00
3. Closing finished goods = opening + production – sold = 2,800 + 20,400 – 20,700 = 2500 Units.
........... Manufacturing Company
Cost of Goods Sold Statement; For the year ended December 31, 1985
Particulars Tk. Tk. Tk.
Opening materials & supplies 40,700
Add: Purchase of materials & supplies 24,800
Materials available for use 65,500
Less: Closing materials & supplies 31,750
Indirect manhood 3,950 (35,700)
Materials Used 29,800
Direct labour Cost 18,600
Prime Cost 48,400
Add: Factory overhead applied 27,450
Manufacturing Cost 75,850
Add: Work-in-Progress (opening) 4,070
Total inputted cost 79,920
Less: Work-in-progress (closing) 4,440
Cost of goods manufactured /Cost of production 75,480
Add: Finished goods (opening) 9,800
Cost of goods available for sale 85,280
Less: Finished goods (closing) 2,500 unit @ Tk. 3.70 9,250
per Unit) 76,030
Cost of goods sold
Income Statement
for the year ended December 31, 1985
Particulars Tk. Tk. Tk.
Particulars Sales (20,700 units) 1,44,900
Less: Cost of goods sold 76,030
Gross Profit 68,870
Less: Commercial overhead
(a) Administrative overhead
(i) Administrative expenses 19,700
(ii) Deprecation (Administrative) 44 19,744
(b) Selling & Distribution expenses
(i) Marketing Exp. 25,050
(ii) Depreciation (Marketing) 46 25,096 44,840
Net profit 24,030

Problem – 25 [N.U. B. Com (Hons.) 1998]

The Electronics Ltd. furnished you the following information for 1998 when it produced and sold 1,00,000
units of a product:
Materials 9,00,000; Direct wages Tk. 6,00,000. Power and electricity Tk. 1,20,000; Factory indirect wages
Tk. 1,50,000; Other factory expenses TK. 55,000, Defective work (cost of rectification) Tk. 30,000; Office
salaries and expenses Tk. 3,35,000; Selling expenses Tk. 55,000; Sale proceeds of scrap Tk. 20,000; Plant
repairs, Maintenance expenses and depreciation Tk. 1,15,000; The net selling price per unit was Tk. 31.60
As from January 1, 1999, the selling price was reduced to Tk. 31.00 per unit. It was estimated that produce
could be increased by 50% in 1999 on account of excess capacity. Material prices and wages rates would
increase by 10% in 1999.
You are required to prepare:
(i) A cost sheet for 1998 showing the cost and profit or loss per unit;
(ii) An estimated cost sheet for 1999. You may assume that 1,50,000 units would be produced and sold
during 1999 and factory overhead would be recovered as a percentage on direct wages and office
and selling overheads as a percentage on factory cost.

Solution
The Electronics Ltd.
Cost Sheet
for the year ended December, 1998 : Output : 1,00,000 units
Particulars Total Cost Per unit Cost
Tk. Tk. Tk. Tk.
Materials used 9,00,000 9.00
Direct wages 6,00,000 6.00
Prime Cost 15,00,000 15.00
Add: Factory Overhead
(i) Power & Electricity 1,20,000 1.20
(ii) Factory Indirect wages 1,50,000 1.50
(iii) Other factory expenses 55,000 0.55
(iv) Defective works (rectification cost) 30,000 0.30
(v) Plant repairs, maintenance & 1,15,000 1.15
depreciation 4,70,000 4.70
(20,000) (0.20)
Less: Sale of scrap 4,50,000 4.50
19,50,000 19.50
Works cost/Cost of production
Add: Commercial overhead: 3,35,000 3.35
(a) Office salaries & expenses 55,000 0.55
(b) Selling expenses 3,90,000 3.90
23,40,000 23.40
Cost of sales/ Total cost 8,20,000 8.20
Profit (Balancing figure) 31,60,000 31.60
Sales
Workings for estimated Cost Sheet for 1999
𝑇𝑘. 4,50,000
(i) Percentages of factory overhead on wages in 1998 = × 100 = 75%
6,00,000
Tk. 3,90,000 x 100 = 20%
19.50,000
𝑇𝑘. 3,90,000
(ii) Percentage of office & selling expenses on works cost in 1998 = × 100 = 20%
19,50,000
Estimated Cost Sheet; for the year 1999
Estimated production = 1,50,000 units
Particulars Tk. Tk.
Materials 1,50,000 Unit @ Tk. 9 per unit 13,50,000
Add: Increase of price (10%) 1,35,000 14,85,000
Direct wages (1,50,000 unit @ Tk. 6.00 per unit) 9,00,000
Add: Increase of price (10%) 90,000 9,90,000
Prime Cost 24,75,000
Add: Factory overhead (75% on wages) 7,42,500
Works cost/Cost of production 32,17,500
Add: Office & selling overhead (20% on works cost) 6,43,500
Cost of sales / Total cost 38,61,000
Estimated profit (Balancing figure) 7,89,000
Sales (1,50,000 units @ Tk. 31 per unit 46,50,000

Problem –26
A manufacturing company has following cost information for the year ended 31 December, 2011. Prepare
a cost sheet showing clearly the cost per unit under the ***…………………… Profit / Loss per unit.
Tk.
Direct materials 25,00,000
Direct labour 8,00,000
Depreciation on factory building 16,000
Insurance :
Staff cars 2,000
Office building 1,500
Factory building 2,000
Delivery van maintenance & ***………. expenses 12,000
Salaries (Marketing sales manager’s salary Tk. 20,000 and factory chief
engineer’s salary Tk. 25,000 2,75,000
Finished goods ***………. expenses 15,000
Branch office expenses 30,000
Depreciation of office building 10,000
Depreciation of staff cars 15,000
Electricity (including Tk. 5,000 for administrative office) 35,000
***…………. 18,000
Sundry factory expenses 4,20,000
***…………. 4,000
***…………. administrative expenses 60,000
Expenses for participating in individual exhibitions 8,000
***………….. units) 50,00,000
***………….. : 10,000
Solution
A Manufacturing Company
Cost Sheet
For the year ended 31 December, 2011
Output : 10,000 units
Particulars Total cost Per unit cost
Tk. Tk. Tk. Tk.
Direct materials 25,00,000 250.00
Direct labour 8,00,000 80.00
Prime cost 33,00,000 330.00
Add: Factory Overhead
(i) Depreciation on factory building 16,000 1.60
(ii) Insurance of factory building 2,000 0.20
(iii) Salary of factory chief engineer 25,000 2.50
(iv) Electricity (35,000 – 5,000) 30,000 3.00
(v) Sundry factory expenses 4,20,000 42.00
4,93,000 49.30
Cost of production / Cost of goods sold 37,93,000 379.30
Add : Commercial expenses :
a. Office & Administrative overhead :
(i) Depreciation of office building 10,000 1.00
(ii) Depreciation of staff cars 15,000 1.50
(iii) Insurance of staff cars 2,000 0.20
(iv) Insurance of office building 1,500 0.15
(v) Salary (2,75,000 – 20,000 – 25,000) 2,30,000 23.00
(vi) Electricity 5,000 0.50
(vii) Other office & Administrative 60,000 6.00
expenses 3,23,500 32.35

b. Selling & Distribution Expenses : 20,000 2.00

(i) Sales manager’s salary 18,000 1.80
(ii) Advertisement 4,000 0.40
(iii) Sales promotion 8,000 0.80
(iv) Expenses in individual exhibition 30,000 3.00
(v) Branch office expenses 15,000 1.50
(vi) Finished goods warehouse
(vii) Delivery van maintenance and 12,000 1.20
running exp. 1,07,000 10.70
42,23,500 422.35
Cost of goods sold 7,76,500 77.65
Add: Profit (balancing figure)
Sales 50,00,000 500.00