Electraunika Ltd. manufactures two types of cables- 'USB Type C Cable' and 'USB Lightning Cable'. As the market is currently dominated by 'USB Type…

CA Intermediate · Cost and Management Accounting · MTP · May 2025
Electraunika Ltd. manufactures two types of cables- 'USB Type C Cable' and 'USB Lightning Cable'. As the market is currently dominated by 'USB Type C Cable', it is produced 3 times the ‘USB Lightning Cable'. The combined cost data of both the cables for the month of March is given below: Particulars (₹) Direct Materials 2,06,25,000 Direct Wages 1,15,50,000 Production Overhead 66,00,000 Administration overhead (related to production) 33,00,000 Selling Cost 59,40,000 Cost bifurcation between both the cables is ascertained as follows: (i) Direct material cost per unit of ‘USB Lightning Cable' was twice than that of 'USB Type C Cable'. (ii) Direct wages per unit for ‘USB Lightning Cable' were 5/3 times the rate of 'USB Type C Cable'. (iii) Production overhead, Administration overhead and selling cost per unit were at same rate for both the types of cable. Other information: (i) 75,000 units of ‘USB Lightning Cable' were produced. (ii) 90% of both the cables produced were sold. (iii) Selling Price was 385 per unit for ‘USB Lightning Cable'. You are required to PREPARE a cost sheet for ‘USB Lightning Cable' showing per unit and Total Sales Value.

Suggested Answer and Working Notes:

Preparation of Cost Sheet for ‘USB Lightning Cable' No. of units produced = 75,000 units No. of units sold = 90% of 75,000 units = 67,500 units Particulars Per unit (₹) Total (₹) Direct materials (Working note- (ii)) 110.00 82,50,000 Direct wages (Working note- (iii)) 55.00 41,25,000 Prime cost 165.00 1,23,75,000 Production overhead (Working note- (iv)) 22.00 16,50,000 Factory Cost 187.00 1,40,25,000 Administration Overhead (Working note- (v)) 11.00 8,25,000 Cost of production 198.00 1,48,50,000 Less: Closing stock (10% of 75,000 units) - (14,85,000) Cost of goods sold i.e. 67,500 units 198.00 1,33,65,000 Selling cost (Working note- (vi)) 22.00 14,85,000 Cost of sales/ Total cost 220.00 1,48,50,000 Profit 165.00 1,11,37,500 Sales value (₹ 385 × 67,500 units) 385.00 2,59,87,500 Working Notes: (i) No. of units produced for 'USB Type C Cable' is 3 times the ‘USB Lightning Cable' = 3 x 75,000 units = 2,25,000 units (ii) Direct material cost per unit of 'USB Type C Cable' = M Direct material cost per unit of ‘USB Lightning Cable' = 2 M Total Direct Material cost = 2 M × 75,000 units + M × 2,25,000 units 2,06,25,000 = 1,50,000 M + 2,25,000 M M = 2,06,25,000 / 3,75,000 = 55 Therefore, Direct material Cost per unit of ‘USB Lightning Cable' = 2 × ₹ 55 = 110 (iii) Direct wages per unit for ‘USB Lightning Cable' were 5/3 times the rate of 'USB Type C Cable'. Direct wages per unit for 'USB Type C Cable' = W Direct wages per unit for 'USB Lightning Cable' = (5/3)W So, (5/3 W x 75,000) + (W x 2,25,000) = 1,15,50,000 W (1,25,000 + 2,25,000) = 1,15,50,000 W (3,50,000) = 1,15,50,000 W = 33 per unit Therefore, Direct material Cost per unit of ‘USB Lightning Cable' = (5/3) x 33 = 55 per unit (iv) Production overhead per unit = 66,00,000 / (75,000+2,25,000) = 22 (v) Administration overhead per unit = 33,00,000 / (75,000+2,25,000) = 11 (vi) Selling cost per unit = 59,40,000 / (90% of (75,000+2,25,000)) = 22

Topics: Cost Sheet

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