The following information relates to a manufacturing concern A Ltd. for the year ended 31st March, 2024. Particulars As on 1st April, 2023 As on…

CA Intermediate · Cost and Management Accounting · PYQS · January 2025
The following information relates to a manufacturing concern A Ltd. for the year ended 31st March, 2024. Particulars As on 1st April, 2023 As on 31st March, 2024 Raw Material (in ₹) 3,40,000 1,80,000 Work in Progress (in ₹) 5,50,000 3,50,000 Particulars Amount Raw Material Purchased 8,00,000 [Inclusive of GST@18% (Ineligible for ITC)] Packaging Cost (primary) 3,00,000 Fee Paid to Independent Directors 5,00,000 Production bonus paid to factory workers 10% of Wages paid to factory workers Job charges paid to job workers 41,000 Salary paid to Supervisor 6,17,900 Wages paid to factory workers 6,30,000 Salary paid to Production Control Manager 7,20,000 Sale of Scrap generated during Manufacturing 50,000 Selling Overheads per unit 2 Salary paid to General Manager 12,40,000 Freight Inwards 2% on Raw Material Purchased Expenses Paid for Quality Control check activities 4,30,000 Particulars Cost Price (₹) WDV as on 1st April, 2023 (₹) Depreciation Rate Insurance Cost per annum Factory Building 25,00,000 21,87,000 10% 2% of Cost Price Plant and Machinery 15,00,000 11,56,000 15% 2% of Cost Price Office Building 40,00,000 36,00,000 10% Nil Additional information: (i) Depreciation is charged on the written down value method. (ii) Stock of finished goods as on 1st April, 2023 was 80,000 units having a total cost of 8,00,000. The entire stock of opening finished goods is sold during the year, closing stock is 70,000 units. During the period, 4,50,000 units were sold. (iii) A Ltd. wants a profit of 20% on Total Sales. Required: Prepare a Cost statement showing the various elements of cost and profit earned for the year ended 31st March, 2024. (9 Marks)

Suggested Answer and Working Notes:

Cost Sheet Particulars (₹) (₹) Material Consumed: Raw materials purchased 8,00,000 Freight inwards (2% of Raw materials purchased) 16,000 Add: Opening stock of raw materials 3,40,000 Less: Closing stock of raw materials (1,80,000) 9,76,000 Direct employee (labour) cost: Wages paid to factory workers 6,30,000 Production bonus paid to factory workers (10%) 63,000 6,93,000 Direct expenses: Job charges paid to job workers 41,000 41,000 Prime Cost 17,10,000 Works/ Factory overheads: Depreciation on factory building (21,87,000 x 10%) 2,18,700 Depreciation on plant & machinery (11,56,000 x 15%) 1,73,400 Insurance premium paid for plant & machinery (15,00,000 x 2%) 30,000 Insurance premium paid for factory building (25,00,000 x 2%) 50,000 Salary paid to supervisors 6,17,900 10,90,000 Gross factory cost 28,00,000 Add: Opening value of W-I-P 5,50,000 Less: Closing value of W-I-P (3,50,000) Factory Cost 30,00,000 Quality control cost: Expenses paid for quality control check activities 4,30,000 4,30,000 Administration cost related with production: Salary paid to Production control manager 7,20,000 7,20,000 Less: Realisable value on sale of scrap and waste (50,000) Add: Primary packing cost 3,00,000 Cost of Production 44,00,000 Add: Opening stock of finished goods (80,000 units) 8,00,000 Less: Closing stock of finished goods (70,000 units) (7,00,000) Cost of Goods Sold 45,00,000 Administrative overheads: Depreciation on office building (36,00,000 x 10%) 3,60,000 Salary paid to General Manager 12,40,000 Fee paid to independent directors 5,00,000 Selling Overheads (4,50,000 units x 2): 9,00,000 30,00,000 Cost of Sales 75,00,000 Profit (25% on cost) 18,75,000 Sales 93,75,000 Working Note: Calculation of value of closing finished goods. Number of units produced = units sold + closing stock – opening stock = 4,50,000 + 70,000 – 80,000 = 4,40,000 units Per unit cost = Cost of production / Number of units produced = 44,00,000 / 4,40,000 units = 10 per unit

Topics: Cost Sheet

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