CMA INTER OFFICIAL GUIDE

CHAPTER: COST SHEET

COST ACCOUNTING
Question 1
From the following information, ascertain the value of stock as on 31st March, 20X2:
Mr. Gopal furnishes the following data relating to the manufacture of a standard product
during the month of April 2013:
Raw materials consumed 15,000
Direct labour charges 9,000
Machine hours worked 900
Machine hour rate 5
Administration overheads 20% on works cost
Selling overhead Re. 0.50 per unit
Units produced 17,100
Units sold 16,000 at 4 per unit
You are required to prepare a cost sheet from the above, showing:
(a) the cost per unit,
(b) cost per unit sold and profit for the period.

Question 2
From the following information for the month of January, prepare a cost sheet to show the
following components: (a) Prime Cost, (b) Factory Cost, (c) Cost of Production, (d) Total Cost.
Direct material 57,000
Direct wages 28,500
Factory rent and rates 2,500
Office rent and rates 500
Plant repairs and maintenance 1,000
Plant depreciation 1,250
Factory heating and lighting 400
Factory manager’s salary 2,000
Office salaries 1,600
Director’s remuneration 1,500
Telephone and postage 200
Printing and stationery 100
Legal charges 150
Advertisement 1,500
Salesmen’s salaries 2,500
Showroom rent 500
Sales 1,16,000

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Question 3
From the following particulars, prepare a cost statement:
Stock, 1-1-2013: Raw materials 30,500
Finished goods 20,400
Stock, 31-1-2013: Raw materials 48,500
Finished goods 10,000
Purchase of raw materials 25,000
Work-in-progress, 1-1-2013 8,000
Work-in-progress, 31-1-2013 9,000
Sales 95,000
Direct wages 20,400
Factory expenses 10,500
Office expenses 5,400
Selling expenses 3,800
Distribution expenses 2,500
Also calculate the percentage of works expenses to direct wages and the percentage of office
expenses to works cost.

Question 4
In respect of a factory the following particulars have been extracted for the year 2013:
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 ₹ 8,000, wages ₹ 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.

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COST ACCOUNTING
Question 5
The accounts of a machine manufacturing company disclose the following information for
the six months ending 31st Dec. 2013.
Materials used 1,50,000
Direct wages 1,20,000
Factory overhead expenses 24,000
Office 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 ₹ 1,250 and expenditure on
productive wages of ₹ 750, so that the price may yield a profit of 20% on the selling price.
For the purpose of price quotation, charge factory overhead as a percentage of direct wages
and charge office overhead as a percentage of works cost.

Question 6
The following extracts of costing information relate to commodity X for the year ending 31-
12-2013.
Purchases of raw materials 6,000
Direct wages 5,000
Rent, rates and insurance 2,000
Carriage inwards 100
Stock (1-1-2013): Raw materials 1,000
Finished products — 200 tonnes 800
Stock (31-12-2013) : Raw materials 1,100
Finished products — 400 tonnes –
Cost of factory supervision 400
Sale of finished products 15,000
Advertising and selling cost is 40 paise per tonne sold. 3,000 tonnes of the commodity were
sold during the year. Prepare a Cost Sheet.

Question 7
The following details are available from a company’s books:
Stock of raw material on 1-1-2013 10,800
Stock of finished goods on 1-1-2013 28,000
Purchases during the year 2,94,000
Productive wages 1,98,800
Sales of finished goods 5,92,000
Stock of finished goods on 31-12-2013 30,000

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COST ACCOUNTING
Stock of raw material on 31-12-2013 13,600
Works overhead 43,736
Office expenses 35,524
The company is about to send a tender for large plant. The costing department estimates that
the material required for its production would cost ₹ 20,000 and wages for making the plant
would cost ₹ 12,000. Tender is to be made keeping a net profit of 20% on the selling price.
State what would be the amount of the tender, if based on the percentages.

Question 8
The accounts of Flex Manufacturing Co. for the year ended 31st March, 2013, show the
following information:
Production wages 2,50,000
Direct material used 3,18,200
Chargeable expenses 30,000
Sales 7,80,000
Drawing office salaries 10,000
Counting office salaries 18,800
Cash discount allowed 3,000
Carriage outward 5,400
Bad debts written off 8,500
Rent, rates and taxes
(i) Office 4,000
(ii) Works 15,400
Travelling expenses 3,600
Traveler’s salaries and commission 8,500
Depreciation on plant and machinery 6,500
Depreciation on office furniture 1,000
Directors’ fee 12,000
Gas and water (3/ 4 Factory, 1/ 4 Office) 2,800
Manager’s salary (3/ 4 Factory, 1/ 4 Office) 24,000
General expenses 4,000
Hire of crane 5,000
Donations to charitable trust 2,000
Prepare a statement showing (i) Prime Cost (ii) Factory Cost and (iii) Total Cost and (iv) Net
Profit.

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Question 9
The following particulars have been extracted from the books of Calcutta Manufacturing Co.
Ltd., Calcutta, for the year ended 31 March 2013
Stock of materials as on 1 April, 2012 47,000
Stock of materials as on 31 March, 2013 50,000
Materials purchased 2,08,000
Drawing office salaries 9,600
Counting house salaries 14,000
Carriage inwards 8,200
Carriage outwards 5,100
Cash discounts allowed 3,400
Bad debts written off 4,700
Repairs of plant, machinery and tools 10,600
Rent, rates, taxes and insurance (factory) 3,000
Rent, rates, taxes and insurance (office) 1,000
Travelling expenses 3,100
Travelling salaries and commission 8,400
Production wages 1,40,000
Depreciation on plant and tools 7,100
Depreciation written off on furniture 600
Director’s fee 6,000
Gas and water charges (factory) 1,500
Gas and water charges (office) 300
General charges 5,000
Manager’s salary 12,000
Out of 48 working hours in a week, the time devoted by the manager to the factory and office
was on an average 40 hours and 8 hours respectively throughout the accounting year. You are
required to prepare a Cost Sheet.

Question 10
From the books of M/ s ZYX Enterprises, the following details have been extracted for the year
ending March 31, 2013:
Stuck or materials— Opening 1,88,000
Closing 2,00,000
Materials purchased during the year 8,32,000
Direct wages paid 2,38,400
Indirect wages 16,000

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Salaries to administrative staff 40,000
Freight — Inward 32,000
Outward 20,000
Sales 15,79,800
Cash discount allowed 14,000
Bad debts written off 18,800
Repairs of plant and machinery 42,400
Rent, rates and taxes — Factory 12,000
Office 6,400
Travelling expenses 12,400
Salesmen’s salaries and commissions 33,600
Depreciation written off— Plant & Machinery 28,900
Furniture 2,400
Director’s fees 24,000
Electricity charges (factory) 48,000
Fuel (for boiler) 64,000
Sale of scrap 500
General charges 24,800
Manager’s salary 48,000
The manager’s time is shared between the factory and the office in the ratio of 20: 80. From
the above details you are required to prepare a cost sheet to show:
(a) Prime Cost; (b) Factory Cost; (c) Cost of Production; (d) Total Cost; (e) Profit.

Question 11
E Ltd. furnish the following information for 10,000 units of a product manufactured during
the year 2013:
Material 90,000
Direct wages 60,000
Power and consumable stores 12,000
Indirect wages 15,000
Factory lighting 5,500
Cost of rectification of defective work 3,000
Clerical salaries and management expenses 33,500
Selling expenses 5,500
Sale proceeds of scrap 2,000
Repairs, maintenance and depreciation of plant 11,500
The net selling price was ₹ 31.60 per unit sold and all units were sold.

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CHAPTER: COST SHEET
COST ACCOUNTING
As from 1-1-2014, the selling price was reduced to ₹ 31 per unit. It was estimated that
production could be increased in 2014 by 50% due to spare capacity. Rates for materials and
direct wages will increase by 10%.
You are required to prepare:
(a) Cost sheet for the year 2013 showing various elements of cost per unit, and
(b) Estimated cost and profit for 2014.
Assume that 15,000 units will be produced and sold during the year and factory overheads
will be recovered as a percentage of direct wages and office and selling expenses as a percentage
of works cost.

Question 12
Bharat Engineering Company manufactured and sold 1,000 sewing machines in 2013.
Following are the particulars obtained from the records of the company:
Cost of materials 80,000
Wages paid 1,20,000
Manufacturing expenses 50,000
Salaries 60,000
Rent, rates and insurance 10,000
Selling expenses 30,000
General expenses 20,000
Sales 4,00,000
The company plans to manufacture 1,200 sewing machines in 2014. You are required to
submit a statement showing the price at which machines would be sold so at to show a profit
of 10% on the selling price. The following additional information is supplied to you:
(a) The price of materials will rise by 20 per cent on the previous year’s level.
(b) Wage rates will rise by 5 per cent.
(c) Manufacturing expenses will rise in proportion to the combined cost of materials and wages.
(d) Selling expenses per unit will remain unchanged.
(e) Other expenses will remain unaffected by the rise in output.

Question 13
Flex Shoe Co. manufacture two types of shoes A and B. Costs for the year ended 31-3-2013
were:
Direct materials 15,00,000
Direct wages 8,40,000
Production overhead 3,60,000
27,00,000

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There was no work-in-progress at the beginning or at the end of the year. It is ascertained
that:
(a) Direct material in type A shoes consists twice as much as that in type B shoes,
(b) The direct wages for type B shoes were 60% of those of type A shoes,
(c) Production overhead was the same per pair of A and B type.
(d) Administrative overhead for each type was 150% of direct wages,
(e) Selling cost was ₹ 1.50 per pair.
(j) Production during the year were: Type A 40,000 pairs of which 36,000 were sold;
Type B 1,20,000 pairs of which 1,00,000 were sold.
(g) Selling price was ₹ 44 for type A and ₹ 28 for type B per pair.
Prepare a statement showing cost and profit.

Question 14
From the following particulars, prepare cost sheet showing the comparative cost per tonne for
the periods:
Three months ended 2013
31st March 30th June
Productive wages 72,000 98,000
Administrative expenses 12,000 12,000
Raw materials 36,000 49,000
Taxes and insurance (factory) 750 750
Light and water 1,000 1,000
Direct expenses 9,000 12,500
Depreciation 2,000 2,000
Factory rent 1,500 1,500
Unproductive labour 30,000 41,000
Factory repairs 3,000 4,500
1,67,250 2,22,250
The tonnage produced in the two quarters was 12,000 and 16,000 respectively

Question 15
Steel Products Company produces a machine that sells for ₹ 300. An increase of 15% in cost
of materials and of 10% in cost of labour is anticipated.
If the only figures available are those given below, what must be the selling price to give the
same percentage of gross profit as before?
(a) Material costs have been 45% of cost of sales, (b) Labour costs have been 40% of cost of
sales.

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CHAPTER: COST SHEET
COST ACCOUNTING
(c) Overhead costs have been 15% of cost of sales, (d) The anticipated increased costs in relation
to the present sale price would cause 35% decrease in the present gross profit.

Question 16
The books of Acme Ltd. present the following data for the month of Jan. 2013.
Direct labour cost 16,000 (160% of factory overhead)
Cost of goods sold 56,000
Inventory accounts showed the following opening and closing balances:
January I January 31
Raw materials 8,000 8,600
Work-in-progress 8,000 12,000
Finished goods 14,000 18,000
Selling expenses 3,400
General and administration expenses 2,600
Sales for the month 75,000
You are required to prepare a cost sheet showing cost of goods manufactured and sold and
profit earned.

Question 17
The following direct costs were incurred on Job No. 239 of XYL Co. Ltd.
Materials ₹ 6,010
Wages: Dept. A — 60 hours @ ₹ 30 per hr.
B — 40 hours @ ₹ 20 per hr.
C — 20 hours @ ₹ 50 per hr.
Overhead for these three departments were estimated as follows :
Variable overheads: Dept. A — ₹ 15,000 for 1,500 labour hours
B — ₹ 4,000 for 200 labour hours
C — ₹ 12,000 for 300 labour hours
Fixed overheads: Estimated at ₹ 40,000 for 2,000 normal working hours.
You are required to calculate the cost of Job No. 239 and quote the price to give profit of 25%
on selling price.

Question 18
A factory uses job costing. The following data are obtained from its books for the year ended
31st December 2013.
Direct materials 90,000
Selling and dist. overheads 52,500

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COST ACCOUNTING
Direct wages 75,000
Administration overheads 42,000
Factory overheads 45,000
Profit 60,900
(a) Prepare a Cost Sheet indicating the Prime cost, Works cost. Production cost, Cost of sales
and the Sales value.
(b) In 2014, the factory received an order for a number of jobs. It is estimated that direct
materials required will be ₹ 1,20,000 and direct labour will cost ₹ 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.

Question 19
Job No. 718 was commenced on 10th October, 2013 and completed on 1st November, 2013.
Materials used were ₹ 600 and labour charged directly to the job was ₹ 400. Other information
were as follows:
Machine No. 215 used for 40 hours; the machine hour rate is ₹ 3.50
Machine No. 169 used for 30 hours; the machine hour rate is ₹ 4
Six welders worked on the job for 5 days of 8 hours each; the direct labour hour rate for
welders is 20 paise.
Other expenditures of the concern not apportioned for calculating the machine hour or the
direct hour rates amounted to ₹ 20,000, total direct wages for the period being ₹ 20,000.
Ascertain the works cost of Job No. 718.

Question 20
The following is the summarized Trading and Profit and Loss Account for the year ending
31st March, 2013 in which year 800 waterproofs were sold by the said company.
Trading and Profit and Loss Account
Particulars Amount Particulars Amount
To cost of material 32000 By sales 160000
To direct wages 48000
To manufacturing Charges 20000
To Gross Profit 60000
160000 160000
To Office salaries 24000 By Gross Profit 60000
To rent and taxes 4000

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To Selling expenses 8000
To general Expenses 12000
To net Profit 12000
60000 60000
Following estimates were made by the costing department of the company for the year ending
31st March,2014:
(a) The output and the sales will be 1,000 waterproofs.
(b) The price of materials will rise by 25% on the previous year’s level.
(c) Wages during the year will rise 12½%.
(d) Manufacturing cost will rise in proportion to the combined cost of materials and wages.
(e) Selling cost per unit will remain unchanged.
(f) Other expenses will remain unaffected by the rise in output.
From the above information, prepare a cost statement showing the price at which the
waterproofs would be marketed so as to show a profit of 10% on the selling price.

Question 21 (Module/December 2023 set 2/June 2024 set 1)

MNQ LLP submits the following information on 31st March 2022. Based on the given data
prepare a statement of cost.

Details ₹

Sales for the year 2,75,000

Inventories at the beginning of the year: Finished goods 7,000
Work in Progress 4,000
Purchase of the material for the year 1,10,000
Material inventory: At the beginning of the year 3,000
At the end of the year 4,000
Direct Labour 65,000
Factory overhead: 60% of direct labour cost
Inventories at the end of the year: Finished goods 8,000
Work in Progress 6,000
Other expenses for year:
Selling expenses - 10% of sales
Administrative expense – 5% of sales

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Question 22 (Module)
X Ltd Provides you the following figures for the year 2021-22:

Details Amount (₹)

Direct Material 3,20,000
Direct Wages 8,00,000
Production Overheads (25% variable) 4,80,000
Administration Overheads (75% fixed) 1,60,000
Selling and Distribution Overheads (2/3 fixed) 2,40,000
Sales @ ₹ 125 per unit 25,00,000

For the year 2022-23, it is estimated that:

1. Output and sales quantity will increase by 20% by incurring additional advertisement
expenses of ₹ 45,200.
2. Material prices will go up 10%.
3. Wage Rate will go up by 5% along with, increase in overall direct labour efficiency by 12%.
4. Variable Overheads will increase by 5%.
5. Fixed Production Overheads will increase by 33-1/3%.
Required:
a) Calculate the Cost of Sales for the year 2021-22 and 2022-23.
b) Find out the new selling price for the year 2022-23.
i) If the same amount of profit is to be earned as in 2021-22.
ii) If the same percentage of profit to sales is to be earned as in 2021-22.
iii) If the existing percentage of profit to sales is to be increased by 25%.
iv) If Profit per unit ₹10 is to be earned.

Question 23 (Module)
The following are the costing records for the year 2021 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 2022. 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 2022 showing the total profit and selling price per
unit.

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Question 24 (Module)
Following data is available from the cost records of a company for the month of March 2022:
1. Opening stock of job as on 1st March 2022
Job no. A 99: Direct Material - ₹80, Direct Wages - ₹150 and Factory Overheads - ₹200.
Job no. A 77: Direct Material - ₹420, Direct Wages - ₹450 and Factory Overheads - ₹400.
2. Direct material issued during the month of March 2022 was:
Job no. A 99 - ₹120
Job no. A 77 - ₹280
Job no. A 66 - ₹225
Job no. A 55 - ₹300
3. Direct labour details for March 2022 were:
Job no. Hours Amount (₹)
A 99 400 600
A 77 200 450
A 66 300 675
A 55 100 225
4. Factory Overheads are applied to jobs on production according to direct labour hour rate
which is ₹2.10 per hour.
5. Factory Overhead incurred in March 2022 were ₹2,100
6. Job numbers A 99 and A 77 were completed during the month. They were billed to the
customers at a price which included 15% of the price of the job for Selling & Distribution
expenses and another 10% of the price for Profit.
Prepare
a. Job Cost Sheet for Job No. A 77 and A 99.
b. Determine the selling price for the jobs.
c. Calculate the value of work in process.

Question 25 (Module)
Prepare Cost Sheet for an engineering company which produces standard components in
batches of 1,000 pieces each. A batch passes through three processes viz. Foundry, Machining
and Assembly.
The materials used for a batch number 001 were: Foundry 1,300 tonnes @ ₹ 50 per tonne
of which 50 tonnes were sent back to stores. Other details

Process Direct Labour Overheads

Foundry 200 Hours @ ₹10 ₹15 per Labour Hour
Machining 100 Hours @ ₹5 ₹20 per Labour Hour
Assembly 100 Hours @ ₹15 ₹10 per Labour Hour

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A comparison of actual costs with estimated cost discloses that material and overheads have
exceeded the estimates by 20% whereas the estimated labour cost is 10% more than the actual.
Show the variances with respect to the estimates.

Question 26 (Module/June 2024 S22/December 2018 set 2/Dec 2024 set 1)

An advertising agency has received an enquiry for which you are supposed to submit the
quotation. Bill of material prepared by the production department for the job states the
following requirement of material:
Paper 10 reams @ ₹1,800 per ream
Ink and other printing material ₹ 5,000
Binding material & other consumables ₹ 3,000
Some photography is required for the job. The agency does not have a photographer as an
employee. It decides to hire one by paying ₹10,000 to him. Estimated job card prepared by
production department specifies that service of following employees will be required for this
job:
Artist (₹12,000 per month) 80 hours
Copywriter (₹10,000 per month) 75 hours
Client servicing (₹9,000 per month) 30 hours
The primary packing material will be required to the tune of ₹4,000. Production Overheads
40% of direct cost, while the Selling & Distribution Overheads are likely to be 25% on
Production Cost. The agency expects a profit of 20% on the quoted price. The agency works
25 days in a month and 6 hours a day.

Question 27 (Module/ December 2024 set 2)

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

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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 upkeep 14,000
Heat, Light & Power 65,000
Rates & Taxes 6,300
Miscellaneous Factory Expenses 18,700
Sales Commission 33,600
Sales Travelling 11,000
Sales Promotion 22,500
Distribution Department Salaries and Wages 18,000
Office Salaries 8,600
Interest on borrowed funds 2,000

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.

Question 28 (Module)
PR Ltd manufactures and sells a typical brand of Tiffin Boxes under its on brand name. The
installed capacity of the plant is 1,20,000 units per year distributable evenly over each month
of calendar year. The Cost Accountant of the company has informed the following cost
structure of the product, which is as follows:
Raw Material ₹ 20 per unit.
Direct Labour ₹ 12 per unit.
Direct Expenses ₹ 2 per unit

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Variable Overheads ₹ 16 per unit
Fixed Overheads ₹ 3,00,000.
Semi-variable Overheads are as follows:
₹ 7,500 per month upto 50% capacity and additional ₹ 2,500 per month for every additional
25% capacity utilization or part thereof.
The plant was operating at 50% capacity during the first seven months of the calendar year
2021, at 100% capacity in the remaining months of the year.
The selling price for the period from 1st January, 2021 to 31st July, 2021 was fixed at ₹
69 per unit. The firm has been monitoring the profitability and revising the selling price to
meet its annual profit target of ₹ 8,00,000. You are required to suggest the selling price per
unit for the period from 1st August, 2021to 31st December, 2021.
Prepare Cost Sheet clearly showing the total and per unit cost and also profit for the period.
1. From 1st January to 31st July, 2021.
2. From 1st August to 31st December, 2021.

Question 29 (Module)
The Northshire Hospital Trust operates two types of specialist X-ray scanning machines, XR1
and XR50. Details for the next period are estimated as follows:
Machine XR1 XR50
Running hours 1100 2000
Variable running costs (excluding plates) 27500 64000
Fixed costs 20000 97500
A brain scan is normally carried out on machine type XR1: this task uses special X-ray plates
costing ₹ 40 each and takes four hours of machine time. Because of the nature of the process,
around 10 per cent of the scans produce blurred and therefore useless results.
Required:
a. Calculate the cost of a satisfactory brain scan on machine type XR1.
b. Brain scans can also be done on machine type XR50 and would take only 1.8 hours per
scan with a reduced reject rate of 6 per cent. However, the cost of the X-ray plates would be
₹ 55 per scan.
Required: Advise which type should be used, assuming sufficient capacity is available on both
types of machine.

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Question 30 (June 2018)
The following data are available from the books and records of VEEMYES Ltd. for the month
of November 2017.
Direct Labour cost : Rs. 20,000 (125 % of factory overheads)
Inventory accounts show the following figures:

November 1 Rs. November 30 Rs.

Raw materials 10,000 20,000

Work in progress 8,000 4,000
Finished goods 10,000 5,000
Selling expenses 15,000
Office expenses 10,000
Sales 1,25,000

The company maintains a profit of 25% on cost.

You are required to prepare a cost sheet for the month of November 2017 with all elements.

Question 31 (December 2018/December 2023 S22)

Z Ltd., manufactured and sold 200 typewriters in the year 2017. Its summarised Trading
and Profit & Loss Account for the year 2017 is as follows:
Total Output (in units) 200

Particulars Rs. Particulars Rs.

To Cost of Material consumed 1,20,000 By Sales 6,00,000
To Direct Wages 1,80,000
To Manufacturing Charges 75,000
To Gross Profit c/d 2,25,000
6,00,000 6,00,000
To Management Expenses 90,000 By Gross Profit b/d 2,25,000
To General Expenses 30,000
To Rent, Rates & Taxes 15,000
To Selling Expenses 45,000
To Net Profit 45,000
2,25,000 2,25,000

For the year 2018, it is estimated that

(i) The output and sales will be 300 typewriters.
(ii) Price of material will rise by 25% compared to previous year level.
(iii) Wages per unit will rise by 10%.

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(iv) Manufacturing charges will increase in proportion to the combined cost of material and
wages
(v) Selling expenses per unit will remain unchanged. Other expenses will remain unaffected by
the rise in output.
Required:
Prepare a Cost Sheet showing the cost at which typewriters will be manufactured in 2018
and give price at which it should by marketed so as to show profit of 10% on selling price.

Question 32 (June 2019)

VIPUL LTD. submits the following information on 31st March, 2019:

Particulars Amount (Rs.)

Sales for the year 55,00,000
Purchases of material for the year 22,00,000
Direct labour 13,00,000
Inventories at the beginning of the year—
Finished goods 1,40,000
Work-in-progress 80,000
Materials inventory—
At the beginning of the year 60,000
At the end of the year 80,000
Inventories at the end of the year—
Work-in-progress 1,20,000
Finished goods 1,60,000

Factory overheads were 60% of the direct labour cost.

Administration expenses were 5% of sales.
Selling & distribution expenses were 10% of sales.
You are required to prepare a Cost Sheet with all elements

Question 33 (December 2019)

SARATHI & CO is manufacturing building bricks and fire bricks. Both the products require two
processes: Brick forming and Heat treatment. The requirements for the two bricks are:
Building Bricks Fire Bricks
Forming per 100 bricks 6 hours 4 hours
Heat treatment per 100 bricks 4 hours 10 hours

Total costs of the two departments in one month were:

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Forming Rs. 42,400
Heat treatment Rs. 97,600
Production during the month was:
Building Bricks 130000 numbers
Fire Bricks 70000 numbers

Question 34 (December 2022)

ZOXIN LTD. manufactures two types of pens 'Super Pen' and 'Normal Pen'. The cost data for
the year ended 31st March, 2022 is as follows:
Direct Materials 8,00,000
Direct Wages 4,48,000
Production Overhead 1,92,000
Total 14,40,000
It is further ascertained that:
(1) Direct materials cost in Super Pen was twice as much as direct material in Normal Pen
(2) Direct Wages for Normal Pen were 60% of those for Super Pen
(3) Production overhead per unit was at the same rate for both the types
(4) Administration overhead was 200% of direct labour for each
(5) Selling cost was ₹ 1 per Super Pen
(6) Production and sales during the year were as follow:

Production Sales
No. of units No. of units
Super pen 40,000 Super pen 36,000
Normal pen 1,20,000

(7) Selling price was ₹ 30 per unit for super pen.

Required:
Prepare a cost sheet for 'Super Pen' showing:
(i) Total work cost
(ii) Cost per unit and Total Cost
(iii) Profit per unit and Total Profit

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Question 35 (June 2023)
M/s Sun (India) Ltd. is an export-oriented unit manufacturing communication equipment of
a standard size. It has to send a tender price quotation (in rupee terms) to its foreign buyer
in the UK. Company submits the following figures relating to year 2023:
Output: 50,000 units
Expenses Incurred
Local Raw Material Consumed 20,00,000
Excise Duty 4,00,000
Imports of Raw Material (Actual Consumption) 2,00,000
Administrative Office Expenses 4,00,000
Direct Labour in works 17,00,000
Salary of the Managing Director 2,00,000
Direct Expenses 3,00,000
Fees of Directors 40,000
Indirect Labour in works 4,00,000
Expenses on Advertising 3,20,000
Stores and Spare Parts 1,40,000
Selling Expenses 5,00,000
Fuel 3,00,000
Packing and Distribution Expenses 3,40,000
Depreciation on Plant 2,00,000
Salaries of Works Personnel 2,00,000
Other information:
(i) Local raw material now costs 10% more.
(ii) A profit margin of 20% on sales is maintained.
(iii) The Government grants subsidy of 40 per unit of export.
Required:
Prepare a statement showing tender price per unit to be submitted to the UK buyer.

Question 36 (December 2023)

The following data are available from the books and records of ROHINT LTD. for the month of
August, 2023.
Direct Labour Cost ₹ 1,20,000 (120% of Factory Overheads)
Cost of Sales ₹ 4,00,000
Sales ₹ 5,00,000
Accounts show the following figures:

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1" August, 2023 (₹) 31 August, 2023 (₹)
Inventory:
Raw material 20,000 35,000
Work-in-Progress 20,000 30,000
Finished goods 50,000 60,000
Other details:
Selling expenses 22,000
General & Admin. Expenses 18,000
General & Admin. Expenses are not relating to the production activity.
You are required to prepare, a cost sheet for the month of August, 2023 showing:
(i) Prime cost
(ii) Works cost
(iii) Cost of Production
(iv) Cost of Goods sold
(v) Cost of Sales and Profit earned

Question 37 (June 2023 S22)

M/s PQR Ltd. submits the following information on 31st March, 2023:
Particulars Amount (₹)
Sales for the year 55,00,000
Purchases of material for the year 22,00,000
Direct labour 13,00,000
Inventories at the beginning of the year-
Finished goods 1,40,000
Work-in-progress 80,000
Materials inventory-
At the beginning of the year 60,000
At the end of the year 80,000
Inventories at the end of the year-
Work-in-progress 1,20,000
Finished goods 1,60,000
Factory overheads were 60% of the direct labour cost.
Administration expenses were 5% of sales.
Selling & distribution expenses were 10% of sales.
You are required to prepare a cost sheet with all elements.

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Question 38 (December 2024 S22)
The following data are available from the books and records of ROHINT LTD. for the month of
September, 2023.
Direct Labour Cost ₹ 1,20,000 (120% of Factory Overheads)
Raw material purchased ₹ 1,65,000
Cost of Sales ₹ 4,00,000
Sales ₹ 5,00,000
Accounts show the following figures:

1" September, 2023 (₹) 30 September, 2023 (₹)

Inventory:
Raw material 20,000 35,000
Work-in-Progress 20,000 30,000
Finished goods 50,000 60,000
Other details:
Selling expenses 22,000
General & Admin. Expenses 18,000

General & Admin. Expenses are not relating to the production activity.
Required:
Summarize a Cost Sheet for the month of September 2024 showing:
(i) Prime cost
(ii) Work cost
(iii) Cost of goods sold
(iv) Cost of sales and profit earned

Question 39 (December 2017 Set 1)

The following are the costing records for the year 2014 of Nelito Systems:
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 management decided to produce 15,000 units in 2015. It is estimated that the cost of
raw materials will increase by 20%, the labour cost will increase by 10%, 50% of the overhead

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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 of Nelito Systems for the year 2015 showing the total profit and
selling price per unit.

Question 40 (June 2018 Set 1)

The following are the costing records for the year 2017 of a manufacturer:
Production 20,000 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 25,000 units in 2017. 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 2017 showing the total profit and selling price per
unit.

Question 41 (June 2018 Set 2/MTP December 2023)

A work order for 100 units of a commodity has to pass through four different machines of
which the machine hour rates are:
Machine P – ₹ 1.25, Machine Q – ₹ 2.50, Machine R – ₹ 3 and Machine S – ₹ 2.25
Following expenses have been incurred on the work order – Materials ₹ 8,000 and Wages ₹
500.
Machine - P has been engaged for 200 hours. Machine - Q for 160 hours, Machine - R for
240 hours and Machine - S for 132 hours.
After the work order has been completed, materials worth ₹ 400 are found to be surplus and
are returned to stores.
Office overhead used to be 40% of works costs, but on account of all-round rise in the cost of
administration, distribution and sale, there has been a 50% rise in the office overhead
expenditure.
Moreover, it is known that 10% of production will have to be scrapped as not being upto the
specification and the sale proceeds of the scrapped output will be only 5% of the cost of sale.
If the manufacturer wants to make a profit of 20% on the total cost of the work order, find
out the selling price of a unit of commodity ready for sale.

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Question 42 (December 2018 Set 1/June 2019 set 2)
A company is manufacturing building bricks and fire bricks. Both the products require two
processes. Brick forming and Heat treatment. The requirements for the two bricks are:
Building Bricks Fire Bricks
Forming per 200 bricks 6 hrs 4 hrs
Heat treatment per 200 bricks 4 hrs 10 hrs
Total costs of the two departments in one month were:
Forming ₹ 42,400
Heat Treatment ₹ 97,600
Production during the month was:
Building Bricks 2,60,000
No’s Fire Bricks 1,40,000 No’s
Prepare statement of manufacturing costs for the two varieties of bricks.

Question 43 (June 2019 Set 1)

The data pertaining to Heavy Engineering Ltd. using are as follows at the end of 31.3.2018.
Direct material ₹ 11,25,000; Direct wages ₹ 9,37,500; Selling and distribution overhead ₹
6,56,250 ; Administrative overhead ₹ 5,25,000, Factory overhead ₹4,50,000 and Profit
₹6,09,000.
(i) Prepare a cost sheet showing all the details.
(ii) For 2017-18, the factory has received a work order. It is estimated that the direct
materials would be ₹ 15,00,000 and direct labour cost ₹ 9,37,500. What would be the
price of work order if the factory intends to earn the same rate of profit on sales,
assuming that the selling and distribution overhead has gone up by 15%? The factory
recovers factory overhead as a percentage of direct wages and administrative and selling
and distribution overheads as a percentage of works cost, based on the cost rates
prevalent in the previous year.

Question 44 (June 2019 Set 1/ December 2024 set 1)

A company manufactures scooters and sells it at ₹3,000 each. An increase of 17% in cost of
materials and of 20% of labour cost is anticipated. The increased cost in relation to the present
sales price would cause at 25% decrease in the amount of the present gross profit per unit.
At present, material cost is 50%, wages 20% and overhead is 30% of cost of sales.
You are required to :
(i) Prepare a statement of profit and loss per unit at present and;
(ii) Compute the new selling price to produce the same percentage of profit to cost of sales as
before.

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Question 45 (December 2019 Set 1)
Golden globe Limited provides the following particulars for the year 2018.

(₹) (₹)
Opening stock of raw materials 35,000 Carriage on goods sold 1,500
Purchase of raw materials 75,000 Rent and rates of Workshop 3,500
Raw materials returned to suppliers 1,500 Fuel, gas, water etc. 1,000

Closing stock of raw materials 17,000 Repairs to plant 600

Wages paid to : Depreciation on Machinery 1,400
Productive workers 20,000 Office expenses 2,000
Non-productive workers 2,500 Direct chargeable expenses 1,000
Salaries paid to office staff 5,000 Advertising 1,500
Carriage on raw materials 1,500 Abnormal loss of raw materials 3,000
purchased
Cash Discounts received 3,000 Loss on sale of investment 5,000

You are required to prepare a cost sheet

Question 46 (December 2023 Set 1)

From the following information, illustrate and prepare a statement showing profit for the
period and determine Cost per Unit.
1. Opening Closing
Raw Materials: ₹29,500 ₹36,000
Work-in-progress:
Material 13,600 12,000
Wages 11,000 16,500
Works overhead 6,600 9,900
Finished Goods: 200 units@ ₹84 1600 Units

2. Purchases of raw material ₹1,90,000, Carriage on purchases ₹1,500, Sale of scrap of raw
materials ₹5,000
3. Wages ₹2,97,000
4. Works overheads are absorbed @ 60% of direct labour cost.
5. Administration overhead are absorbed @ ₹12 per unit produced.
6. Selling and distribution overhead are absorbed @ 20% of selling price.
7. Sales – 7600 units at a profit of 10% on sales price.

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Cost sheet Format
Particulars Total cost Cost per unit
Opening Stock of Direct Raw Materials
Add: Purchases
Add: Carriage Inward
Add: Octroi, Customs Duty and other expenses on
purchases
Less: Closing Stock of Direct Raw Materials
Cost of Direct Materials Consumed
Direct or Productive Wages
Direct (or Chargeable) Expenses
Prime Cost
Add: Works or Factory Overheads:
Indirect Materials
Indirect Wages
Leave Wages
Overtime Premium
Fuel and Power
Coal
Factory Rent and Taxes
Insurance
Factory Lighting
Supervision
Works Stationery
Canteen and Welfare Expenses
Repairs
Haulage
Works Salaries
Depreciation of Plant & Machinery
Works Expenses
Gas and Water
Drawing Office Salaries
Technical Director’s Fees
Laboratory Expenses
Works Telephone Expenses
Internal Transport Expenses
Less: Sale of Scrap

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Factory cost/Works Cost before FG and WIP
Add: Operating Stock of Work-in-progress
Less: Closing Stock of Work-in-progress
Factory Cost/Works Cost before FG
Add: Office and Administrative Overheads:
Office Salaries
Director’s Fees
Office Rent and Rates
Office Stationery and Printing
Sundry Office Expenses
Depreciation and Repairs of Office Equipment
Depreciation of Office Furniture
Subscription to Trade Journals
Office Lighting
Establishment Charges
Director’s Travelling Expenses
Postage
Legal Charges
Audit Fees
Counting House/Office Salaries
Cost of Production
Add: Opening Stock of Finished Goods
Less: Closing Stock of Finished Goods
Cost of Goods Sold
Add: Selling and Distribution Overheads:
Advertising
Showroom Expenses
Salesmen’s Salaries and Expenses
Packing Expenses
Carriage Outward
Commission of Sales Agents
Cost of Catalogues
Expenses of Delivery Vans
Collection Charges
Travelling Expenses
Cost of Tenders
Warehouse Expenses

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Cost of Mailing Literature
Sales Manager’s Salaries
Sales Director’s Fees
Showroom Expenses
Sales Office Expenses
Depreciation and Repairs of Delivery Vans
Expenses of Sales Branches
Cost of Sales (or Total Cost)
Profit
Sales

Items excluded from cost

The following items are of financial nature and thus not included while preparing a cost sheet:
1. Cash discount
2. Interest paid
3. Preliminary expenses written off
4. Goodwill written off
5. Provision for taxation
6. Provision for bad debts
7. Transfer to reserves
8. Donations
9. Income-tax paid
10. Dividend paid
11. Profit/ loss on sale of fixed assets
12. Damages payable at law, etc.
13. Bad debts

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Cost sheet Format
S.No Particulars Total Cost (₹) Cost per unit (₹)

1. Direct materials consumed:

Opening Stock of Raw Material xxx
Add: Additions/ Purchases xxx
Less: Closing stock of Raw Material xxx
xxx
2. Direct employee (labour) cost xxx
3. Direct expenses xxx
4. Prime Cost (1+2+3) xxx
5. Add: Works/ Factory Overheads xxx
6. Gross Works Cost (4+5) xxx
7. Add: Opening Work in Process xxx
8. Less: Closing Work in Process (xxx)
9. Works/ Factory Cost (6+7-8) xxx
10. Add: Quality Control Cost xxx
11. Add: Research and Development Cost xxx
12. Add: Administrative Overheads (relating to production xxx
activity)
13. Less: Credit for Recoveries/Scrap/By-Products/ misc. (xxx)
income
14. Add: Packing cost (primary) xxx
15. Cost of Production (9+10+11+12-13+14) xxx
16. Add: Opening stock of finished goods xxx
17. Less: Closing stock of finished goods (xxx)
18. Cost of Goods Sold (15+16-17) xxx
19. Add: Administrative Overheads (General) xxx
20. Add: Marketing Overheads:
Selling Overheads xxx
Distribution Overheads xxx
21. Cost of Sales (18+19+20) xxx

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Arnav Inspat Udyog Ltd. has the following expenditures for the year ended 31st March, 2021:
S.No. Particulars Amount (₹) Amount (₹)
(i) Raw materials purchased 10,00,00,000
(ii) GST paid on the above purchases @18% (eligible 1,80,00,000
for input tax credit)
(iii) Freight inwards 11,20,600
(iv) Wages paid to factory workers 29,20,000
(v) Contribution made towards employees’ PF & ESIS 3,60,000
(vi) Production bonus paid to factory workers 2,90,000
(vii) Royalty paid for production 1,72,600
(viii) Amount paid for power & fuel 4,62,000
(ix) Amount paid for purchase of moulds and patterns 8,96,000
(life is equivalent to two years production)
(x) Job charges paid to job workers 8,12,000
(xi) Stores and spares consumed 1,12,000
(xii) Depreciation on:
Factory building 84,000
Office building 56,000
Plant & Machinery 1,26,000
Delivery vehicles 86,000 3,52,000
(xiii) Salary paid to supervisors 1,26,000
(xiv) Repairs & Maintenance paid for: Plant &
Machinery 48,000
Sales office building 18,000
Vehicles used by directors 19,600 85,600
(xv) Insurance premium paid for:
Plant & Machinery 31,200
Factory building 18,100
Stock of raw materials & WIP 36,000 85,300
(xvi) Expenses paid for quality control check activities 19,600
(xvii) Salary paid to quality control staffs 96,200
(xviii) Research & development cost paid for
improvement in production process 18,200
(xix) Expenses paid for pollution control and
engineering & maintenance 26,600
(xx) Expenses paid for administration of factory work 1,18,600

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(xxi) Salary paid to functional mangers:
Production control 9,60,000
Finance & Accounts 9,18,000
Sales & Marketing 10,12,000 28,90,000
(xxii) Salary paid to General Manager 12,56,000
(xxiii) Packing cost paid for:
Primary packing necessary to maintain quality 96,000
For re-distribution of finished goods 1,12,000 2,08,000
(xxiv) Wages of employees engaged in distribution of
goods 7,20,000
(xxv) Fee paid to auditors 1,80,000
(xxvi) Fee paid to legal advisors 1,20,000
(xxvii) Fee paid to independent directors 2,20,000
(xxviii) Performance bonus paid to sales staffs 1,80,000
(xxix) Value of stock as on 1st April 2020:
Raw materials 18,00,000
Work-in-process 9,20,000
Finished goods 11,00,000 38,20,000
(xxx) Value of stock as on 31st March 2021:
Raw materials 9,60,000
Work-in-process 8,70,000
Finished goods 18,00,000 36,30,000

Amount realized by selling of scrap and waste generated during manufacturing process =
86,000.
Prepare Cost sheet.

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