The following figures relate to two jobs of a manufacturing business : | Particulars | Job No. 1 (₹) | Job No. 2 (₹) | | --- | --- | --- | | Direct Materials | 900 | 1,200 | | Direct Labour | 600 | 900 | | Chargeable expenses | 100 | 300 | Work on cost is 50% on prime cost and office on cost is 10% of work cost. Find out the total cost for each Job.

The following figures relate to two jobs of a manu – Class 12 Cost Accounting

Question 84 of 85

The following figures relate to two jobs of a manufacturing business :

Particulars	Job No. 1 (₹)	Job No. 2 (₹)
Direct Materials	900	1,200
Direct Labour	600	900
Chargeable expenses	100	300

Work on cost is 50% on prime cost and office on cost is 10% of work cost. Find out the total cost for each Job.

ChseodishaCHSE Odisha Plus Two (Class 12) Commerce Board 2024Subjective· 8mImportance★★★★★est

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Prime cost + 50% works on-cost + 10% office on-cost gives Job 1 total ₹2,640 and Job 2 total ₹3,960.

Step 1 — Prime cost = Direct Materials + Direct Labour + Chargeable expenses.

Step 2 — Works on-cost = 50% of prime cost; Works cost = Prime cost + Works on-cost.

Step 3 — Office on-cost = 10% of works cost; Total cost = Works cost + Office on-cost.

Cost Statement for the two Jobs:

Particulars	Job No. 1 (₹)	Job No. 2 (₹)
Direct Materials	900	1,200
Direct Labour	600	900
Chargeable expenses	100	300
Prime Cost	1,600	2,400
Add: Work on-cost (50% of Prime Cost)	800	1,200
Works Cost	2,400	3,600
Add: Office on-cost (10% of Works Cost)	240	360
Total Cost	2,640	3,960

Workings: …

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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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