Following information relate to a manufacturing concern for the year ended 31st March, 2023: (₹) Raw Material (opening) 2,28,000 Raw Material…

CA Intermediate · Cost and Management Accounting · MTP · May 2024
Following information relate to a manufacturing concern for the year ended 31st March, 2023: (₹) Raw Material (opening) 2,28,000 Raw Material (closing) 3,05,000 Purchases of Raw Material 43,50,000 Freight Inwards 1,20,000 Direct wages paid 12,56,000 Direct wages-outstanding at the end of the year 1,50,000 Factory Overheads 20% of prime cost Work-in-progress (opening) 1,92,500 Work-in-progress (closing) 1,40,700 Administrative Overheads (related to production) 1,73,000 Distribution Expenses 16 per unit Finished Stock (opening)- 1,320 Units 6,08,500 Sale of scrap of material 7,000 The firm produced 14,350 units of output during the year. The stock of finished goods at the end of the year is valued at cost of production. The firm sold 14,903 units at a price of 579 per unit during the year. PREPARE cost sheet of the firm.

Suggested Answer and Working Notes:

Cost sheet for the year ended 31st March, 2023. Particulars Amount (₹) Raw materials purchased 43,50,000 Add: Freight Inward 1,20,000 Add: Opening value of raw materials 2,28,000 Less: Closing value of raw materials (3,05,000) 43,93,000 Less: Sale of scrap of material (7,000) Materials consumed 43,86,000 Direct Wages (12,56,000 + 1,50,000) 14,06,000 Prime Cost 57,92,000 Factory overheads (20% of Prime Cost) 11,58,400 Add: Opening value of W-I-P 1,92,500 Less: Closing value of W-I-P (1,40,700) Factory Cost 70,02,200 Add: Administrative overheads 1,73,000 Cost of Production 71,75,200 Add: Value of opening finished stock 6,08,500 Less: Value of closing finished stock [₹ 500(71,75,200/14,350) × 767] (3,83,500) (1,320 + 14,350 – 14,903 = 767 units) Cost of Goods Sold 74,00,200 Distribution expenses (₹ 16 × 14,903 units) 2,38,448 Cost of Sales 76,38,648 Profit (Balancing figure) 9,90,189 Sales (₹ 579 × 14,903 units) 86,28,837

Topics: Cost Sheet

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