Illustration 1.

Calculate prime cost from the following information:-

Direct material - Rs. 40,000, Direct labour - Rs. 30,000 Direct expenses - Rs. 25.000
Solution: Prime cost = Direct Material + Direct labour + Direct expenses
= Rs. 40,000
+ Rs.30, 000 + Rs. 25,000
= Rs. 95,000

Illustration [Link] prime cost from the following information:Opening stock of raw material = Rs. 12,500
Purchased raw material = Rs. 75,000
Expenses incurred on raw material = Rs. 5,000
Closing stock of raw material = Rs. 22,500
Wages Rs. 47,600 Direct expenses Rs. 23,400

Solution: -

Calculation of raw material consumed:Raw material consumed = Opening stock of material + purchases of Raw material + expenses
incurred on raw material - closing stock of raw material
= Rs 12,500 + Rs 75,000 + Rs 5,000 Rs 22,500
= Rs. 92,500 Rs 22,500
= Rs. 70,000

Prime cost

= Raw material consumed + Direct labour + Direct expenses

= Rs 70,000 + Rs 47,600 + Rs 23,400
= Rs 1, 41,000

OR

It can be shown in vertical form such as cost sheet

Particular
Opening stock of raw material
Add:- Purchase
Add:- Expenses incurred on purchases
Raw material available
Less :- closing stock of raw material
Raw material consumed
Add:- Direct wages or labour
Add:- Direct expenses
Prime cost

Details (Rs)
12,500
7,500
5,000
--------------92,500
22,500
---------------

Amount (Rs)

70,000
47,600
23,400
-------------1,41,000

Illustration 3.

Calculate works cost or factory cost from the following details:-

Raw material consumed

Direct wages
Direct expenses
Factory expenses 80% of direct wages
Opening stock of work in progress
Closing stock of work in progress

Solution: -

= Rs 50,000
= Rs20, 000
= Rs 10,000
= Rs 15,000
= Rs 21,000

Calculation of factory cost

Particular

Amount (Rs)

Direct material consumed

Add:- Direct wages
Add:- Direct Expenses

50,000
20,000
10,000
-------------

Prime cost
Add:- Factory expenses

Amount (Rs)

80,000
16,000
-------------96,000
15,000
-------------1,11,000
21,000
-------------90,000

Current manufacturing cost

Add:- Opening stock of work in progress
Total goods processed during the period
Less:- Closing sock of work in progress
Factory cost or work cost

Illustration 4.

Calculate cost of production from the following information:Raw material purchased = Rs 42,500
Freight paid
= Rs 5,000
Labour charges
= Rs 12,500
Direct expenses
= Rs 10,000
Factory overhead 80% of Direct labour charges
Administrative overhead = 10% of work cost
Raw material
Work in progress

Solution: -

Opening stock
8,000
7,500

Closing stock
10,000
9,000

Calculation of cost of production:Particular

Material purchased
Add:- freight
Total cost of material purchased

Amount (Rs)
42,500
5,000
------------47,500

Amount (Rs)

Add:- Opening stock of Raw material

Material available for consumption
Less:- Closing stock of Raw material
Raw material consumed
Add:- Direct labour charges
Add:- Direct expenses
Prime cost
Add:- Factory overhead

8,000
-----------55,500
10,000
-----------45,500
12,500
10,000

Current manufacturing cost

Add:- Opening stock of work in progress
Total goods processed during the period
Less:- Closing stock of work in progress
Factory cost
Add:- Administrative overhead
Cost of production

68,000
10,000
-----------78,000
7,500
-----------85,500
9,000
-----------76,500
7,650
-----------84,150

Illustration 5. Prepare cost sheet from the following particular in the book of B. M.
Raw material purchased = Rs. 1, 20,000
Paid freight charges
= Rs 10,000
Wages paid to laborers = Rs 35,000
Directly chargeable expenses = Rs 25,000
Factory on cost
= 20% of prime cost
General and administrative expenses = 4% of factory cost
Selling and distribution expenses = 5% of production cost
Profit 20% on sales
Opening stock
Closing stock
Raw material
15,000
20,000
Work in progress
17,500
24,000
Finished goods
20,000
27,500

Rehman

Solution:-

Book of B. M. Rehman
Cost sheet
Raw material purchased
Add:- freight charges
Total cost of raw material purchased
Add:- opening stock of raw material
Cash of raw material available
Less:- closing stock of raw material
Raw material consumed
Add:- wages paid to labours
Add:- Directly chargeable expenses
Prime cost
Add:- Factory overhead 20% of prime cost
Current manufacturing cost
Add:- Opening stock of work in progress
Total goods processed during the period
Less:- closing stock of work in progress
Factory on work cost
Add:- General & administrative expenses 4% of factory cost
Cost of production
Add:- opening stock of finished goods
Goods available for sales
Less:- closing stock of finished goods
Cost of goods sold
Add:- selling and distribution expenses 5% of production
cost
Cost of sales
Add:- Profit

1,20,000
10,000
--------------1,30,000
15,000
--------------1,45,000
20,000
-------------1,25,000
35,000
25,000
-------------1,85,000
37,000
--------------2,22,000
17,500
--------------2,39,500
24,000
--------------2,15,500
8,620
--------------2,24,120
20,000
-------------2,44,120
27,500
-------------2,16,620
11,206
-------------2,27,826
56,956.50

--------------2,84,782.50

Sales

Illustration 6.

Prepare cost sheet in the book of M. B. Rehman from the following particulars.

Opening stock: Raw material

Finished goods
Closing stock: Raw material
Finished goods
Raw material purchased
Wages paid to laboures
Chargeable expenses
Rent and Taxes
Power
Experimental expenses
Sale of wastage of material
Office management salary
Office printing & stationery
Salaries to salesman
Commission to traveling agents
Sales

=
=
=
=
=
=
=
=
=
=
=
=
=
=

=
Rs 5,000
Rs 4,000
=
Rs 4,000
Rs 5,000
Rs 50,000
Rs 20,000
Rs 2,000
Rs 7,400
Rs 3,000
Rs 600
Rs 200
Rs 4,000
Rs 200
Rs 2,000
Rs 1,000
Rs 1, 00,000

Solution:-

Book of B. M. Rehman
Cost sheet
Particular
Raw material purchased
Add:- Opening stock of raw material
Raw material for consumption
Less:- closing stock of raw material
Raw material consumed
Less:- Sale of wastage of materials

Details (Rs)
50,000
5,000
--------------55,000
4,000
--------------51,000
200
-------------

Add:- Direct labour

Add:- Direct chargeable expenses
Prime cost
Add:- Factory overhead
Rent & Taxes
Power
Experimental charges
Factory cost

7,400
3,000
600
--------------

Amount (Rs)

50,800
20,000
2,000
-------------72,800

11,000
83,800

Add:- Administrative overhead:Office management salary

Office printing & stationery

4,000
200
---------------

Cost of production
Add:- Opening stock of finished goods
Goods available for sales
Less:- closing stock of finished goods
Cost of goods sold
Add:- selling and distribution overhead:Salaries of salesman
Commission to traveling agent

2,000
1,000
--------------

Cost of sales
Profit
Sales

Illustration 7.

4,200
88,000
4,000
------------92,000
5,000
------------87,000

3,000
90,000
10,000
-------------1,00,000

The cost of sale of production A is made up as follows:-

Material used in manufacturing

Material used in packing material
Material used in selling the product
Material used in the factory
Material used in the office
Labour required in production
Labour required for supervision in factory
Expenses direct factory
Expenses indirect factory
Expenses office
Depreciation of office building
Depreciation on factory plant
Selling expenses
Freight on material
Advertising

Rs
Rs
Rs
Rs
Rs
Rs
Rs
Rs
Rs
Rs
Rs
Rs
Rs
Rs
Rs

5,500
1,000
150
175
125
1,000
200
500
100
125
75
175
350
500
125

Assuming that all products manufactured and sold, what should be the selling price be fixed to
obtain a profit of 20% on selling price.

Solution
Cost Sheet
Particular
Direct material:Material used in manufacturing
Material used in Packing material

Amount (Rs)

Amount (Rs)

5,500
1,000

Amount (Rs)

Freight on material

500
-------------

Direct wages:labour require in production

Direct expenses:- Direct factory

7,000
1,000
500
-----------8,500

Prime cost
Add:- Factory overhead
Indirect material used in factory
Indirect labour required for supervision
Indirect factory expenses
Depreciation factory

75
200
100
175
-------------

Factory on works cost

Add:- office & administrative expenses
Indirect material
Indirect expenses office
Indirect depreciation

125
75
------------

Total cost of production

Add:- selling and distribution overhead:Indirect material
Indirect expenses
Advertisement

350
125
------------

Cost of sales
Profit

275
-------------

550
9050

125
200
-------------

325
9375

150
475
-------------

Sales

625
10,000
2,500
----------12,500

Illustration 8.
Prepare a statement of cost from the following trading and P/L account for the year ending
March 31, 2008
Particular
To opening stock material
Finished goods
To purchases
To cost of moulds
To salary of factory manger
To depreciation of machine

Amount (Rs) Particular

12,000 By sales
40,000 By
closing
stock
material
1,20,000 Finished goods
3,000
1,000
800

Amount (Rs)
2,00,000
20,000
50,000

To gross profit

63,200
-------------2,70,000
-------------9,000 By Gross profit
6,000 By interest from
bank
1,000 By dividend received
800 By rent received
2,000
700
1,200
1,500
2,000
700
600
39,000
-------------65,100
--------------

To office salary
To salesman salary
To insurance of office building
To godown expenses
To directors fees
To telephone charges
To showroom expenses
To delivery van expenses
To preliminary expenses
To interest on deb.
To market research exp.
To net profit

--------------2,70,000
------------63,200
800
200
900

-------------65,100
--------------

Solution
Statement of cost
(For the year ending 31st March 2008)
Particular
Direct material:Raw material purchased
Add:- opening stock of raw materials
Raw material for consumption
Less:- Closing sock of raw materials
Raw material consumed
Add:- Direct labour
Prime cost
Add:- Factory overhead:Cost of moulds
Factory manager salary
Depreciation on machinery

Factory cost
Add:- office and administrate overhead
Salary
Insurance
Directors fees
Telephone charges

Details (Rs)

Amount (Rs)

1,20,000
12,000
--------------1,32,000
20,000
--------------1,12,000
30,000
--------------1,42,000
3,000
1,000
800
---------------

9,000
1,000
2,000
700
---------------

4,800
--------------1,46,800

12,700

------------1,59,500
40,000
-------------1,99,500
50,000
-------------1,49,500

Cost of production
Add:- Opening stock of finished goods
Goods available for sales
Less:- Closing stock of finished goods
Cost of goods sold
Add:- selling & distribution ext:Salesmans salary
Insurance (godown)
Showroom expenses
Expenses of delivery van
Market research expenses

6,000
800
1,200
1,500
600
-------------

Cost of sales
Profit
Sales

10,100
---------------1,59,600
40,400
---------------2,00,000

Illustration 9.
The following inventory data relate to Nazia Ltd.
Inventories
Finish goods
Work in progress
Raw materials

Opening
Rs 1,100
Rs 700
Rs 900

Closing
Rs 950
Rs 800
Rs 950

Additional information:Cost of goods available for sales

= Rs 6840
Total goods processed during the period = Rs 6540
Factory on cost
= Rs 1670
Direct material used
= Rs 1930
Requirements:(i)
determine raw material purchase
(ii)
determine the direct labour and cost incurred
(iii) determine the cost of goods sold

Solution
(i)
OR
OR
(ii)

Raw material purchased:Raw material consumed

Rs 1,930
Rs 1,930 + Rs 50
Rs 1,980
Direct labour cost:-

=
=
=
=

opening stock + purchases closing stock

Rs 900 + Purchases Rs 950
purchases
Raw material purchased

Cost of goods processed during the year

Less: - Opening work in progress
Less: - Factory overheads
Prime cost
Less: - Raw material consumed
Direct labour cost
(iii)

= Rs 6,540
= Rs 700
--------------Rs 5,840
= Rs 1,670
--------------= Rs 4,170
= Rs 1930
-------------= Rs 2,240

Cost of goods sold:= cost of goods available for sales closing stock finished goods
= 6840 950 = Rs 5890

Illustration 10.
Mr. Zia furnishes the following data related to the manufacture of a standard product during the
month of August 2008
Raw material consumed
Direct labour
Machine hours worked
Machine hour rate
Administration overheads
Selling overheads
Unit produced
Unit sold

=
-

Rs 15,000
Rs 5,000
Rs 900
Rs 5
20% of works cost
Rs 0.50 per unit
Rs 17,100
16,000 @ Rs 4 per unit

You are required to prepare a cost sheet from the above showing:The cost per unit
Cost per unit sold and profit for the period

Solution
Book of Zia
Cost sheet
(For the month of August 31, 2008)
Particular
Direct material consumed
Direct labour
Direct expenses
Prime cost
Factory overheads
(900 hours @ Rs 5 per hour)
Work cost
Administrative overheads

Amount (Rs)

Amount (Rs)

15,000
5,000
4,000
-------------24,000

0.878
0.292
0.233
-------------1.403

4,500
-------------28,500

0.263
--------------1.666

@ 20% of works cost

Cost of production
Less:- closing stock on August 31, 2008
(1100 units @ Rs 2 per unit)
Cost of goods sold
Selling overheads @ Rs 0.50 per unit for 16000
Cost of sales
Profit
Sales (1600 unit)
* Closing stock

5,700
-------------34,200

0.333
--------------2,000

2,200
----------32,000
8,000
----------40,000
24,000
-----------64,000

-----------------2.000
0.50
------------2.50
1.50
-----------4.00

= unit produced - units sold

= 17100-16000
= 1100 units

Exercise Questions.
Theoretical Questions:1) Explain the meaning of cost accountancy
2) Define
a) Direct materials
b) Direct wages
c) Direct expenses
3) What is cost accounting? Discuss briefly its important functions in a business firm
4) Explain the important objectives of cost accounting?
5) Distinguish between:a) Direct expenses and indirect expenses?
b) Direct labour and indirect labour?
c) Direct materials and indirect materials?
6) Distinguish between costing and cost accounting
7) What is financial accounting? How it is different from cost-accounting?
8) Mention the elements of cost
9) Explain the classification of direct labour
10)How the overheads are different from the expenses?
11)State at least five each type of overheads
a) Factory overheads
b) Administrative overheads
c) Selling and distribution overheads
12)What are the components of direct cost?
13) Write the formula of calculating the raw material consumed
14)Explain the meaning of cost of goods sold and cost of sales
15)Explain the meaning of
a) First cost
b) Works cost and works on cost
c) Cost of production and goods available for sales

Practical problems (Short Answers)

1.

Opening stock of raw material

Closing stock of raw material
Material purchased
Find raw material consumed

- Rs 15,000
- Rs 20,000
- Rs 1, 20,000
(Ans. 1, 15,000)

2.

3.

Raw material consumed

- Rs 1, 02,000
Raw material for consumption
- Rs 1, 10,000
Raw material purchased
- Rs 1, 00,000
Find opening & closing stock of raw material (Ans. Rs 10,000 and Rs 8,000)
Prime cost
- Rs 1, 85,000
Current manufacturing cost
- Rs 2, 22,000
Total goods processed during the period
- Rs 2, 39,500
Works cost
- Rs 2, 15,000
Find factory overheads, opening and closing stock of work in progress
(Ans. Rs 37,000, Rs 17,500 and Rs 24,000)

4.

Cost of production
- Rs 11,206
Goods available for sales
- Rs 12,206
Cost of goods sold
- Rs 10,831
Cost of Sales
- Rs 11, 391
Sales
- Rs 12,000
Find opening and closing stock of finished goods, selling expenses and profit or loss (Ans. Rs 1,000,
Rs 1,375, Rs 560 and Rs 609 profit)
5.

Direct material consumed

Direct labour 50% of material consumed
Direct expenses
Factory overheads Office overheads Find office cost

- Rs 60,000
33/% of direct labour
40% of direct labour
on cost 66/% of works
(Ans. Rs 1, 20,000)

PRACTICAL PROBLEMS (long answers)

1.
From the following particulars prepare a cost sheet showing the total cost per tone for the
period ended 31st December 1998
Rs
Raw material
Productive wages
Direct expenses
Unproductive wages
Factory rent and terms
Factory lighting
Factory heating
Motive power
Haulage

33,000
35,000
3,000
10,500
7,500
2,200
1,500
4,400
3,000

Rs
Directors fees (office)
Factory cleaning
Sundry office expenses
Estimating
Factory stationery
Office stationery
Factory insurance
Office insurance
Legal expenses

2,000
500
200
800
750
900
1,100
500
400

Directors fees (works)

Depreciation of
- plant and machinery
- office building
- delivery vans
Bad debts
Advertising
Sales department
salaries

1,000 Rent of warehouse

Unkeeping of delivery vans
2,000 Bank charges
1,000 Commission on sales
200 Loose tools written off
100 Rent and taxes (office)
300 Water supply
1,500

300
700
50
1,500
600
500
1,200

The total output for the period has been 10,000 tones.
(Ans. Prime cost Rs 71,000 works cost Rs 1,08,050 office cost Rs 1,13,600 total cost Rs 1,18,200
cost per tone Rs 11.82)
2.

Prepare a cost sheet to show the total cost of production and cost per unit of goods
manufactured by a company for the month of July 1994. Also find out the cost of sales.
Rs
Stock of raw materials
1-7-1994
Raw materials purchased
Stock of raw materials
31-7-1994
Manufacturing wages
Depreciation on plant
Loss on sale of a part of
plant

Rs

3,000 Factory rent & rates

3,000

28,000 Office rent

4,500 General expenses

500
400

7,000 Discount on sales

1,500 Advertisement
300 Expenses to be charged fully
income tax paid

300
600
2,000

The number of units produced during July 1994 was 3,000

The stock of finished goods was 200 and 400 units on 1-7-1994 and 31-7-1994 respectively. The
total cost of units on hand on 1-7-1994 was Rs 2,800. All these had been sold during the month.
(Ans. Prime cost Rs 33,500 factory cost Rs 38,000 cost of production Rs 38,900 cost of sales Rs
37416)
3.
The following particulars relating to the year 1994 have been taken from the books of a
chemical works manufacturing and selling a chemical mixture:

Raw materials
Finished mixture
Factory stores
Purchases
Raw materials
Factory stores
Sales

Stock on 1st Jan. 1994

Rs

Rs

2,000
500
------

2,000
1,750
7,250

1,60,000
------

1,80,000
24,250

Finished mixture
Factory scrap
Factory wages
Power
Depreciation of machinery
Salaries
Factory
Office
Selling
Expenses
Direct
Office
Selling
Stock on 31st December 1994
Raw material
Finished mixture
Factory stores

1,53,050
---------------------

9,18,000
8,170
1,78,650
30,400
18,000

----------------

72,220
37,220
41,500

----------------

18,500
18,200
18,000

1,200
450
------

5,550

The stock of finished mixture at the end of 1994 is to be valued at the factory cost of the mixture
for that year. The purchase price of rawmaterials uncharged throughout 1994.
Prepare a statement giving the maximum possible information about cost and its break up for the
year 1994.
(Ans. Prime cost Rs 3,77,800 factory cost Rs 5,16,200 cost of production of finished mixture sold Rs
5,71,852 cost of sales Rs 6,31,352)
4.

Calculate
a)
Value of raw-materials consumed
b)
Total cost of production
c)
Cost of goods sold and
d)
The amount of profit from the following particulars:
Rs
Opening stock
Raw materials
Finished goods
Closing stock
Raw materials
Finished goods
Raw materials purchased
Wages paid to labourers

Chargeable expenses
Factory rent, rates & taxes

Power
5,000 Factory heating and lighting
4,000 Factory insurance
Experimental Expenses
4,000 Sales of wastage of materials
5,000 Office management salaries
50,000 Office printing and stationery
20,000 Salaries
of
salesmen
commission
of
traveling
agent
2,000
5,000 Sales

(Ans. (a) Rs 50,800, (b) Rs 87,500, (c) Rs 89,500, (d) Rs 10,500)

Rs
2,000
2,000
1,000
500
200
4,000
200
2,000

1,00,000

[Hint sales of raw-materials wastage of Rs 200 has been deducted from the cost of raw-materials]

5.

The cost of the sale of product X is made up as follows:

Rs
Materials used in manufacturing
Materials used in packing materials
Materials used in selling the product
Materials used in office
Materials used in factory
Labour required in producing
Salary paid to works manager and other principal officers of the factory
Expenses indirect office
Expenses direct factory
Bad debts
Packing expenses
Lighting and heating charges of the factory
Expenses indirect factory

10,20
2,500
350
75
125
2,500
450
250
1,000
300
150
200
125

Assuming that all the products manufactured are sold, what should be the selling price to obtain a
profit of 20% on cost price?
Illustrate in a chart fork for presentation to your mange, the division of costs of product X
[Ans. Prime cost Rs 16,200, works cost Rs 17,100 cost of sales Rs 18,225 sales Rs 21,870]
6.
Calculate the prime cost, factory cost, total cost of production and cost of
following particulars:

sales from the

Rs.

Raw materials consumed

Directly chargeable expenses
Wages paid to labourers
Grease, oil, cotton waste etc.
Salary manager and clerks
Insurance of stock of raw materials
Consumable stores
Printing and stationery:
Factory
Office
Sales deptt.

Rent of office building

Depreciation :

12,000
500
2,500
25
1,750
300
400
50
200
100
-----------

350
150

Factory premises
Office furniture
Delivery vans

200
50
75
---------

Power and fuel

Contribution to provident fund of factory employees
Salaries of administrative directors
Bank charges
Cost of samples
Salaries of sales manger
Advertising
Packing material
Storage in stocks of finished goods

325
500
1,000
100
75
250
300
500
350
20

[Ans. Prime cost Rs 15,000, factory cost Rs 19225 total cost of production Rs 19,800 cost of sales Rs
21,395]
7.

Calculate
a) Value of raw-materials consumed
b) Total cost of production
c) Cost of goods sold and
d) The amount of profit from the following particulars:
Rs
Opening stock:
Raw materials
Finished goods
Closing stock:
Raw-materials
Finished goods
Raw materials purchased
Wages paid to labourers
Direct expenses
Experimental expenses
Factory printing and stationery
Rent :
Factory
Office
Wages of fireman
Lighting office
Audit fees
Telephone expenses
Advertising
Market research expenses
Salary of godown keepers
Traveling expenses
Commission of traveling agent
Sales

1,350
2,500
750
1,500
20,000
8,000
1,250
450
350
250
120
--------

370
1,000
125
150
500
1,250
550
175
750
500
50,000

[Ans. (a) value of raw materials consumed Rs. 20,600 (b) Total cost of production Rs 32,795, (c)
cost of goods sold Rs 33,795, (d) profit Rs 12,980]
8.

Prepare a statement of cost from the following trading and profit and loss account for the
year ending 31st March, 1995.
Particulars
Opening stock:
Materials
Finished goods
Purchase of materials
Direct labour
Grease, oil etc.
Salary of storekeeper
Power & fuel
Gross profit c/d

Lighting:
Office
Sales deptt.
Depreciation:
Office premises
Delivery vans
Fees of office manager
Bank charges
Selling expenses
Sales commission
Preliminary expenses
Packing expenses
Dividends paid on
Share capital of company
Discount on debentures
Net profit

Rs

Particulars

Sales
8,000 Closing stock:
25,000 Materials
70,000 Finished goods
10,000
500
700
800
30,000
------------1,45,000
------------Gross profit b/d
500 Dividends received
650 Interest on loan
Transfer fees
1,000 Received
750
2,000
1,500
1,500
500
3,000
1,100
1,000
500
20,000
-----------34,000

Rs
1,00,000
15,000
30,000

------------1,45,000
------------30,000
2,000
600
1,450

----------34,000

[Ans. Prime cost Rs 73,000, works cost Rs 75,000, total cost of production Rs 80,000 cost of goods
sold Rs 75000 cost of sales Rs 79,000 profit Rs 21,000]
9.

The following data relate to the manufacture of standard product during the four week
ending on 28th Oct. 1994.
Raw materials consumed
Direct wages
Machine hr worked

Rs 20,000
Rs 12,000
950 (hrs)

Machine hour rate

Office overhead 15% on works cost
Selling overhead
Units produced
Units sold @ Rs 2.50 each
Prepare a statement from the above showing:
(a) The cost of production per unit, and
(b) The profit for the period

Rs 2.00
Rs 0.37 per unit
20,000
18,000

[Ans. (a) Rs 1,949 (b) Rs 3,258

10.

A firm has purchased a plant to manufacture a new product, the cost data for which is given
below:
Estimated annual sales
Estimated costs:
Material
Direct labour
Overheads
Administrative expenses
Selling expenses
Calculate the selling price if profit per unit is Rs 1.02

24,000 units
Rs 4.00 per unit
Rs 0.60 per unit
Rs 24,000 per year
Rs 28,800 per year
15% of sales

[Ans. Rs 9.20]
11.

Prepare a cost sheet from the following data to find out profit and cost per unit:
Raw materials consumed
Direct wages
Factory overheads 20% of direct wages
Office overheads 10% of factory cost
Selling overheads
Unit produced
Units sold
Selling price

Rs 1,60,000
Rs 80,000
12,000
4,000
3,600
Rs 100 per unit

[Ans. Prime cost Rs 2,40,000, factory cost Rs 2,56,000, cost of production Rs 2,81,600, cost of sales
Rs 2,65,440, profit Rs 94,560]