From the following information prepare a statement of cost and profit: | Particulars | 1.1.2018 (Rs.) | 31.12.2018 (Rs.) | | --- | --- | --- | | Stock of Raw materials | 30,000 | 35,000 | | Stock of Work-in-Progress | 15,000 | 20,000 | | Stock of Finished goods | 43,700 | 54,000 | Transactions during the year: | Particulars | Rs. | | --- | --- | | Indirect wages | 9,720 | | Sales | 3,25,000 | | Factory Rent | 7,830 | | Office Salaries | 15,030 | | General Expenses | 13,500 | | Office Rent | 2,000 | | Rent of Showroom | 1,200 | | Purchase of Raw materials | 1,20,000 | | Productive wages | 90,000 | | Plant Repairs | 3,420 | | Depreciation on Plant | 8,360 | | Salesman Salaries | 7,650 | | Factory Lighting | 7,380 |

> > [!TLDR] > Building the statement stage by stage gives Works cost Rs. 2,36,710, Cost of production Rs. 2,67,240, Cost of sales Rs. 2,65,790 and **Profit Rs. 59,210**. > > **Raw material consumed** = Opening RM + Purchases − Closing RM = 30,000 + 1,20,000 − 35,000 = Rs. 1,15,000. > > **Statement of Cost and Profit for the year ended 31.12.2018** > > | Particulars | Rs. | Rs. | > | --- | --- | --- | > | Raw material consumed (30,000 + 1,20,000 − 35,000) | | 1,15,000 | > | Add: Productive (direct) wages | | 90,000 | > | **Prime Cost** | | **2,05,000** | > | Add: Factory overheads: | | | > | Indirect wages | 9,720 | | > | Factory rent | 7,830 | | > | Plant repairs | 3,420 | | > | Depreciation on plant | 8,360 | | > | Factory lighting | 7,380 | 36,710 | > | Add: Opening work-in-progress | | 15,000 | > | Less: Closing work-in-progress | | (20,000) | > | **Works / Factory Cost** | | **2,36,710** | > | Add: Office & administration overheads: | | | > | Office salaries | 15,030 | | > | General expenses | 13,500 | | > | Office rent | 2,000 | 30,530 | > | **Cost of Production** | | **2,67,240** | > | Add: Opening stock of finished goods | | 43,700 | > | Less: Closing stock of finished goods | | (54,000) | …

From the following information prepare a statement – Class 12 Cost Accounting

Question 24 of 85

From the following information prepare a statement of cost and profit:

Particulars	1.1.2018 (Rs.)	31.12.2018 (Rs.)
Stock of Raw materials	30,000	35,000
Stock of Work-in-Progress	15,000	20,000
Stock of Finished goods	43,700	54,000

Transactions during the year:

Particulars	Rs.
Indirect wages	9,720
Sales	3,25,000
Factory Rent	7,830
Office Salaries	15,030
General Expenses	13,500
Office Rent	2,000
Rent of Showroom	1,200
Purchase of Raw materials	1,20,000
Productive wages	90,000
Plant Repairs	3,420
Depreciation on Plant	8,360
Salesman Salaries	7,650
Factory Lighting	7,380

ChseodishaCHSE Odisha Plus Two (Class 12) Commerce Board 2019Subjective· 8mImportance★★★★★est

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Building the statement stage by stage gives Works cost Rs. 2,36,710, Cost of production Rs. 2,67,240, Cost of sales Rs. 2,65,790 and Profit Rs. 59,210.

Raw material consumed = Opening RM + Purchases − Closing RM = 30,000 + 1,20,000 − 35,000 = Rs. 1,15,000.

Statement of Cost and Profit for the year ended 31.12.2018

Particulars	Rs.	Rs.
Raw material consumed (30,000 + 1,20,000 − 35,000)		1,15,000
Add: Productive (direct) wages		90,000
Prime Cost		2,05,000
Add: Factory overheads:
Indirect wages	9,720
Factory rent	7,830
Plant repairs	3,420
Depreciation on plant	8,360
Factory lighting	7,380	36,710
Add: Opening work-in-progress		15,000
Less: Closing work-in-progress		(20,000)
Works / Factory Cost		2,36,710
Add: Office & administration overheads:
Office salaries	15,030
General expenses	13,500
Office rent	2,000	30,530
Cost of Production		2,67,240
Add: Opening stock of finished goods		43,700
Less: Closing stock of finished goods		(54,000)

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Same / Similar Concept — real previous-year questions on the same or a closely similar concept, not this exact question.

CBSE 2024Set ANNUAL1 mark
$Q. Rectify the underlined portions of the following sentences :$
(vii) Prime cost plus factory overhead is total cost. (underlined : total)
›Reveal solutionSolution
Correct word: Prime cost + factory overhead = WORKS cost (not total cost).

The cost sheet build-up is:

Prime cost + Factory/Works overhead = Works (Factory) cost

Works cost + Office & Administration overhead = Cost of production

Cost of production + Selling & Distribution overhead = Total cost (cost of sales) …
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CBSE 2022Set ANNUAL1 markMCQ
$Q. Cost of production is equal to :$
(a) Prime cost plus factory overheads
(b) Factory cost plus administration overheads
(c) Direct material plus direct expenses
(d) Total cost plus profit
›Reveal solutionSolution

Cost of production = Works (factory) cost + Office/Administration overheads — option (b).

The cost-sheet ladder in +2 Class-12 Cost Accounting (CHSE Odisha, NCERT/CBSE-aligned) is:

Stage Build-up
Prime cost Direct material + Direct wages + Direct expenses
Works / Factory cost Prime cost + Factory (works) overheads
Cost of production Works cost + Office/Administration overheads

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CBSE 2022Set ANNUAL1 markMCQ
$Q. Aggregate of direct material, direct wages and direct expenses is known as :$
(a) Factory cost
(b) Cost of production
(c) Total cost
(d) Prime cost
›Reveal solutionSolution

Direct material + Direct wages + Direct expenses = Prime cost — option (d).

In +2 Class-12 Cost Accounting (CHSE Odisha), prime cost is the aggregate of all direct costs:

Element
Direct material xxx
Direct wages xxx
Direct expenses xxx

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CBSE 2022Set ANNUAL1 markMCQ
$Q. Cost of sale is the sum total of :$
(a) Cost of production plus selling and distribution overheads
(b) Prime cost plus factory overheads
(c) Cost of production plus selling and distribution overheads plus % of profit
(d) Total cost minus profit
›Reveal solutionSolution

Cost of sales = Cost of production + Selling & Distribution overheads — option (a).

In the cost-sheet build-up (CHSE Odisha +2 Cost Accounting):

Stage Build-up
Cost of production Works cost + Office/Administration overheads
Cost of sales (total cost) Cost of production + Selling & Distribution overheads
Sales Cost of sales + Profit
…

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CBSE 2019Set ANNUAL1 mark
$Q. Correct the underlined portion of the following sentence: Cost of production + selling and distribution overhead = Factory cost. (underlined portion: "Factory cost")$
›Reveal solutionSolution

The underlined "Factory cost" is wrong — adding selling and distribution overhead to cost of production gives Total Cost (Cost of Sales), the last line of the cost sheet.

The cost sheet builds up in a fixed sequence (a core idea in the CHSE Odisha +2 Class-12 Cost Accounting syllabus):

Stage Build-up
Prime cost Direct material + Direct labour + Direct expenses
Factory / Works cost Prime cost + Factory (works) overhead
Cost of production Factory cost + Office & administration overhead

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Stage	Build-up
Prime cost	Direct material + Direct wages + Direct expenses
Works / Factory cost	Prime cost + Factory (works) overheads
Cost of production	Works cost + Office/Administration overheads

Element
Direct material	xxx
Direct wages	xxx
Direct expenses	xxx

Stage	Build-up
Cost of production	Works cost + Office/Administration overheads
Cost of sales (total cost)	Cost of production + Selling & Distribution overheads
Sales	Cost of sales + Profit
…

Stage	Build-up
Prime cost	Direct material + Direct labour + Direct expenses
Factory / Works cost	Prime cost + Factory (works) overhead
Cost of production	Factory cost + Office & administration overhead

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