Dhol Makers Ltd. sold 6,000 units of a musical instrument "Dholak", The cost data for the year ended 31st March, 2025 is as follows: Particulars (₹)…

CA Intermediate · Cost and Management Accounting · PYQS · January 2026
Dhol Makers Ltd. sold 6,000 units of a musical instrument "Dholak", The cost data for the year ended 31st March, 2025 is as follows: Particulars (₹) Expenses paid for pollution control and maintenance 93,400 Expenses paid for quality control check activities 70,000 Lease rent of production assets 1,20,000 Hire charges paid for hiring specific equipment 315 per hour Primary packing cost 51,600 Direct Labour Wages 6,00,000 Fee paid for technical assistance 1,26,000 Opening stock of finished goods as on 1st April, 2024 (2,000 units) 10,10,000 Closing stock of finished goods as on 31st March, 2025 (1,000 units) ? Cost of production 27,50,000 It is further ascertained that: (1) Labour is paid @1,000 per labour hour. (2) Specific equipment is hired for the number of labour hours worked. (3) The company follows the 'First-In, First-Out' (FIFO) method for closing stock valuation. (4) Selling and distribution overhead is 25 per dholak. (5) Profit is 20% on sales. You are required to prepare a cost sheet showing: (i) Raw material consumed (ii) Prime cost (iii) Works/Factory cost (iv) Cost of goods sold (v) Cost of sales (vi) Net profit & Sales

Suggested Answer and Working Notes:

Cost Sheet of Dhol Makers Ltd. for the year ended 31st March, 2025 Sl. No. Particulars (₹) (₹) (i) Material Consumed (see working note 3) 15,00,000 Direct Labour Wages 6,00,000 (iii) Direct expenses: Hire Charges paid for hiring specific equipment (315per hour x 600 labour hours worked) (see working note 1) 1,89,000 Fees paid for technical assistance 1,26,000 3,15,000 Prime Cost 24,15,000 (iv) Works/Factory overheads: Lease rent of production assets 1,20,000 (v) Expenses paid for pollution control and maintenance 93,400 2,13,400 Works/Factory Cost 26,28,400 (vi) Add: Expenses paid for quality control check activities 70,000 (vi) Add: Primary packing cost 51,600 Cost of Production (Given) 27,50,000 Add: Opening stock of finished goods (2,000 units) 10,10,000 Less: Closing stock of finished goods (₹ 27,50,000 / 5,000 units X 1,000 units) (5,50,000) Cost of Goods Sold 32,10,000 (vii) Selling and Distribution Overheads (25per unit x 6,000 units sold) 1,50,000 Cost of Sales 33,60,000 Profit (20% on sales or 25% on cost) 8,40,000 Sales 42,00,000 Working Notes: 1. Calculation of No. of Direct Labour Hours worked = Direct Labour Wages/Labour Rate per hour = 6,00,000/1,000 per hour = 600 Direct Labour Hours 2. Calculation of No. of units produced: Particulars Units No. of units sold 6,000 Add: No. of units of closing stock of finished goods 1,000 Less: No. of units opening stock of finished goods (2,000) No. of units produced 5,000 3. Value of Raw Material Consumed: Particulars (₹) (₹) Cost of Production 27,50,000 Less: Expenses paid for quality control check activities (70,000) Less: Primary packing cost (51,600) Works/Factory Cost 26,28,400 Less: Works/ Factory overheads: Lease rent of production assets 1,20,000 Expenses paid for pollution control and maintenance 93,400 (2,13,400) Prime Cost 24,15,000 Less: Direct expenses: Hire Charges paid for hiring specific equipment (315per hour x 600 labour hours worked) (see working note 1) 1,89,000 Fees paid for technical assistance 1,26,000 (3,15,000) Less: Direct Labour Wages (6,00,000) Value of Material Consumed 15,00,000

Topics: Cost Sheet

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