Page 37 - DMGT202_COST_AND_MANAGEMENT_ACCOUNTING

Cost and Management Accounting

Notes
Example: From the following information, extracted from the records of the M/s
Sundaram & Co., prepare cost statement of M/s Sundaram & Co.

The stock position of the fi rm is:
Particulars ` 1-4-2000 ` 31-3-2001
Stock of raw materials 80,000 1,00,000
Stock of fi nished goods 2,00,000 3,00,000
Stock of work in progress 20,000 28,000

Particulars ` Particulars `
`
`
Indirect labour 1,00,000 Administrative expenses 2,00,000
Oil 20,000 Electricity 60,000
Insurance on fi xtures 6,000 Direct labour 6,00,000
Purchase of raw materials 8,00,000 Depreciation on Machinery 1,00,000
Sale commission 1,20,000 Factory rent 1,20,000
Salaries of salesmen 2,00,000 Property tax on building 22,000
Carriage outward 40,000 Sales 24,00,000
Solution:

Cost Sheet
`
Particulars ` `
`
Opening stock of raw materials on 1st April, 2000 80,000
(+)Purchase of raw materials 8,00,000
(-)Closing stock of raw materials on 31st March 1,00,000
Raw materials consumed during the year 7,80,000
(+)Direct labour 6,00,000
Prime cost 13,80,000
Factory overheads:
Indirect labour 1,00,000
Oil 20,000
Insurance on fi xtures 6,000
Electricity 60,000
Depreciation on machinery 1,00,000
Factory rent 1,20,000
Property tax on factory building 22,000 4,28,000
(+)Opening stock of semi-fi nished goods 20,000
(-)Closing stock of semi-fi nished goods 28,000
Factory cost 18,00,000
(+)Administration overheads 2,00,000
Cost of Production 20,00,000
(+)Opening stock of fi nished goods 2,00,000
(-)Closing stock of fi nished goods 3,00,000
Contd...

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