Page 49 - DCOM202_COST_ACCOUNTING_I

Unit 3: Cost Sheet and Unit Costing

Notes
Example: Calculate the factory cost for the following data:

`
Cost of Direct Materials 2,00,000
Direct Wages 50,000
Direct Expenses 10,000
Wages of Foreman 5,000
Electric power 2,000
Lighting of the Factory 4,000
Storekeeper’s Wages 2,500
Oil and Water 1,000
Rent of the Factory 10,500
Depreciation in plant 1,000
Consumable Store 5,000
Repairs and Renewal plant 7,000
Solution:

Factory Cost = prime Cost + Factory Overheads
prime Cost = Cost of Direct Materials + Direct Wages + Direct Expenses
= ` 2,00,000 + ` 50,000 + ` 10,000
= ` 2,60,000

Factory Overheads = Wages of Foreman + Electric power + Lighting of the Factory +
Storekeeper’s Wages + Oil and Water + Rent of the Factory + Depreciation
in plant + Consumable Store + Repairs and Renewal plant

= 2,00,000 + 50,000 + 10,000 + 5,000 + 2,000 + 4,000 + 2,500 + 1,000 + 10,500
+ 1,000 + 5,000 + 7,000
= ` 2,98,000
Hence, Factory Cost = 2,60,000 + 2,98,000

= ` 5,58,000

Factory cost

Factory overheads prime cost

Wages for foreman
Electric power

Storekeeper’s wages
Oil and water
Factory rent

Repairs and Renewals

Depreciation

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