Question 1

RS RS
Direct Materials 1 600 2 000
Direct Wages 1 200 1 400
Direct Expenses 160 200
PRIME COSTS 2 960 3 600
Factory Overheads
Works overheads 1 1 480 1 800
WORKS COSTS 4 440 5 400
Office Overheads
General overheads 2 888 1 080
COST OF SALES 5 328 6 480
Profit 3 1 332 1 620
Selling Price 4 6 660 8 100
Notes
1 Works overheads : 50% on prime costs =50% * 2,960 =50% * 3,600
1 480 1 800
2 General overheads : 20% on works costs =20% * 4,440 =20% * 5,400
888 1 080
3 Profit : 25% on cost =25% * 5,328 COS 80
1 332 PROFIT 20
SALES 100
4 Profit : 20% on sales
Profit = 6,480 * (20/80)
1 620
OR Sales = 6,480 / (80%)
8 100
COST SHEET
NOTE
Question 2
RS RS RS RS
Direct Materials 3 140 2 650
Direct Wages 9 400 5 700
Direct Expenses 2 100 1 410
PRIME COSTS 14 640 9 760
Factory Overheads
Factory supervision 1 2 160 1 440
WORKS COSTS 16 800 11 200
Selling and distribution Overheads
Packing 2 240 160
Selling expenses 3 3 000 1 440
COST OF SALES 20 040 12 800
Cost per unit 0,80 1,07
Profit 2,00 6,00
Selling Price 2,80 7,07
Notes
1 Factory supervision : Rs 3,600 = 14,640 * 3,600 = 9,760 * 3,600
In proportion to works cost ( 14,640 + 9,760) ( 14,640 + 9,760)
2 160 1 440
2 Packing: RS 400 = 16,800 * 400 = 11,2000 * 400
In proportion to works cost ( 16,800 + 11.200) ( 16,800 + 11.200)
240 160
3 Selling Expenses 4,440 Quantity 25 000 12 000
=25,000 * 4440 =12,000 * 4440
37,000 37,000
RS 3 000 1 440
COST SHEET
NOTE
ORDINARY ALBUMS MUSICAL ALBUMS
Question 3
RS RS RS RS
Direct Materials 1 13 000 65 000
Direct Wages 2 7 000 28 000
Direct Expenses 3 1 000 5 000
PRIME COSTS 21 000 98 000
Factory Overheads
Shop cost 4 7 000 21 200
WORKS COSTS 28 000 119 200
Office Overheads
Office costs 5 2 800 3 500
PRODUCTION COST 30 800 122 700
Selling and distribution Overheads
S&D 6 3 200 12 400
COST OF SALES 34 000 135 100
Profit 5 000 19 868
Selling Price 39 000 154 968
Cost per unit 390 310
Notes
1 Direct Materials '=13,000 * 5 65 000
2 Direct Wages '=7,000*5*80% 28 000
3 Direct Expenses '=1,000 * 5 5 000
4 Shop cost: Variable part - 40% = 40% * 7,000 2 800 '= 2,800*5 14 000
Fixed part - 60% =60% * 7,000 4 200 '= 4,200+3,000 7 200
7 000 21 200
5 Office cost 2 800 '=2,800 * 1.25 3 500
6 S&D : Variable part -70% = 70% * 3,200 2 240 '= 2,240*5 11 200
Fixed part - 30% =30% * 3,200 960 '= 960 * 1.25 1 200
3 200 12 400
COST SHEET
NOTE
100 SOFAS 500 SOFAS