Illustrations · Q8
Q.Prepare a Cost Sheet from the following particulars, showing Prime Cost, Factory Cost, Cost of Production, Cost of Goods Sold, Cost of Sales and Sales:
- Direct Material: ₹70,000
- Direct Wages: ₹40,000
- Direct Expenses: ₹10,000
- Factory Overhead: ₹30,000
- Office & Administration Overhead: ₹15,000
- Opening Stock of Finished Goods (at cost): ₹20,000
- Closing Stock of Finished Goods (at cost): ₹35,000
- Selling & Distribution Overhead: ₹10,000
- Profit: 25% on Cost of Sales
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Start your 14-day free trial to unlock the full solution →Cost of Production (₹1,65,000) is the cost of everything MANUFACTURED this period — but not everything manufactured is necessarily SOLD this period. Opening Stock of Finished Goods (carried over from last period, sold THIS period) must be ADDED, and Closing Stock of Finished Goods (manufactured this period but not yet sold) must be SUBTRACTED, to arrive at the Cost of Goods actually SOLD.
| Particulars | Total Cost (₹) |
|---|---|
| Direct Material | 70,000 |
| Direct Wages | 40,000 |
| Direct Expenses | 10,000 |
| Prime Cost | 1,20,000 |
| Add: Factory Overhead | 30,000 |
| Factory Cost (Works Cost) | 1,50,000 |
| Add: Office & Administration Overhead | 15,000 |
| Cost of Production | 1,65,000 |
| Add: Opening Stock of Finished Goods | 20,000 |
| Less: Closing Stock of Finished Goods | (35,000) |
| Cost of Goods Sold | 1,50,000 |
| Add: Selling & Distribution Overhead | 10,000 |
| Cost of Sales | 1,60,000 |
| Add: Profit (25% on Cost of Sales = 25% × 1,60,000) | 40,000 |
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