ILLUSTRATION 1
1,00,000 units were produced in a factory. Per unit material cost was ` 10 and per unit labour
cost was ` 5. That apart it was agreed to pay royalty @ ` 3 per unit to the Japanese collaborator
who supplied technology.
Required
Calculate Manufacturing Cost
ILLUSTRATION 2
Mr. Vimal runs a factory which produces soaps. Following details were available in respect of his
manufacturing activities for the year ended on 31.3.2022:
Rs.
Opening Work-in-Process (10,000 units) 16000
Closing Work-in-Process (12,000 units) 20000
17000
Opening inventory of Raw Materials 0
19000
Closing inventory of Raw Materials 0
82000
Purchases 0
Hire charges of machine @ ` 0.60 per unit manufactured
22000
Hire charges of factory 0
Direct wages-Contracted @ ` 0.80 per unit
manufactured and @ ` 0.40 per
unit of
Closing W.I.P.
18000
Repairs and Maintenance 0
Units produced – 5,00,000 units
Required
Prepare a Manufacturing Account of Mr. Vimal for the year ended 31.3.2022.
ILLUSTRATION 3
On 31st March, 2022 the Trial Balance of Mr. White were as follows:
Trial Balance as on 31st March, 2022
Amou Amou
Particulars nt Particulars nt
Stock on 1st April 2021
2100 1500
Raw Materials 0 Sundry creditors 0
Work in Progress 9500 Bills payable 7500
1550
Finished goods 0 Sale of scrap 2500
Sundry Debtors 2400 Commission 450
0 received
Provision for
Carriage on Purchases 1500 doubtful debts 1650
1500 1000
Bills Receivable 0 Capital account 00
1300 1672
Wages 0 Sales 00
1000
Salaries 0 Bank overdraft 8500
Telephone, Postage etc. 1000
Repairs to Office Furniture 350
1700
Cash at Bank 0
1000
Office Furniture 0
Repairs to Plant 1100
Purchases 8500
7000
Plant and Machinery 0
Rent 6000
Lighting 1350
General Expenses 1500
3028 3028
00 0
The following additional information is available:
Stocks on 31st March, 2022 were:
Raw Materials ` 16,200
Finished goods ` 18,100
Semi-finished goods ` 7,800
Salaries and wages unpaid for March 2022 were respectively, ` 900 and ` 2,000
Machinery is to be depreciated by 10% and office furniture by 71/2 %
Provision for doubtful debts is to be maintained @ 1% of sales
Office premises occupy 1/4 of total area.
Lighting is to be charged as to 2/3 to factory and 1/3 to office.
Prepare the Manufacturing Account Trading Account, Profit and Loss Account and the Balance
Sheet relating to 31st March 2022.
PQ.1
Mr. Pankaj runs a factory which produces motor spares of export quality. The following
details were obtained about his manufacturing expenses for the year ended on 31.3.2022.
Rs.
W.I.P Opening 39000
0
50700
Closing 0
12100
Raw Materials Purchases 00
30200
Opening 0
31000
closing 0
Returned 18000
Indirect
material 16000
21000
Wages Direct 0
Indirect 48000
Royalty on 13000
Direct expenses production 0
23000
Repairs & Maintenance 0
Depreciation on factory
shed 40000
Depreciation on plant &
machinery 60000
By-product at
selling price 20000
You are required to prepare Manufacturing Account of Mr. Pankaj for the year ended on 31/03/22.
PQ.2
Following are the Manufacturing A/c, Creditors A/c and Trading A/c provided by
Ms. Shivi related to 2021-22. There are certain figures missing from these accounts.
Raw
Materials
A/C
Dat Amoun Dat Amoun
e Particluars t e Particluars t
To opening 10000 By raw material
stock 0 consumed
To creditors By closing stock
Creditors
A/C
Dat Amoun Dat Amoun
e Particluars t e Particluars t
22000 15000
To bank 00 By balance c/d 00
To balance 60000
c/d 0
Manufacturi
ng A/c
Dat Particluars Amoun Dat Particluars Amoun
e t e t
To raw
materials 17940
consumed By trading 00
To 35000
depreciation 0
20000
To wages 0
To direct 24400
expenses 0
Additional Information:
1) Purchase of machinery worth ` 10,00,000 has been omitted. Machinery are
chargeable at a depreciation rate of 10%.
2) Wages include the following
Paid to Factory Workers - ` 3,00,000
Paid to labour at office - ` 50,000
3) Direct Expenses include following:
Electricity charges of ` 80,000 of which 30% pertained to office.
Fuel Charges of ` 20,000
Freight Inwards of ` 35,000
Delivery charges to customers - ` 20,000.
You are required to prepare revised Manufacturing A/c, and Raw Material A/c.
PQ.3
The following is the trial balance of Mr. Pandit for the year ended 31st March, 2022:
Trial Balance as on 31st March 2022
Debit Credit
Particulars balance Particulars balance
Opening Stock:
1,50,000. Sunndry
Raw Materials 00 creditors 50,000.00
Purchase
Finished goods 75,000.00 returns 5,000.00
5,00,000. 1,00,000.
Purchase of Raw Materials 00 Capital 00
1,00,000. Long-term- 2,00,000.
Land & Building 00 loan 00
Provision for
bad
and doubtful
Loose tools 30,000.00 debts 2,000.00
Plant & Machinery 30,000.00 Bills payable 24,000.00
8,50,000.
Investments 25,000.00 Sales 00
Bank
Cash in Hand 20,000.00 overdraft 23,000.00
Cash at Bank 5,000.00
Furniture & Fixtures 15,000.00
Bills Receivable 15,000.00
Sundry Debtors 40,000.00
Drawings 20,000.00
Salaries 20,000.00
Coal and Fuel 15,000.00
Factory rent & rates 20,000.00
General Expenses 4,000.00
Advertisement 5,000.00
Sales Return 10,000.00
Bad Debts 4,000.00
Direct Wages (Factory) 80,000.00
Power 30,000.00
Interest Paid 7,000.00
Discount Allowed 3,000.00
Cariiage inward 15,000.00
Carriage outward 7,000.00
Commission paid 9,000.00
12,54,000 12,54,000
.00 .00
Additional Information
Stock of finished goods at the end of the year `1,00,000.
A provision for doubtful debts is to be created. at 5% on Sundry Debtors. Depreciation
on building ` 1,000 and ` 3,000 on Plant & Machinery to be provided.
Accrued commission of ` 12,500 is to be received for the year. Interest has accrued on
investment ` 15,000.
Salary Outstanding ` 2,000 and Prepaid Interest ` 1,500.
You are required to prepare Manufacturing, Trading and Profit and Loss Account for the
year ended 31st March, 2022.
