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Unit 2: Unit and Output Costing
Cost of goods sold 19,00,000 Notes
Selling overheads:
Sales commission 1,20,000
Salaries of salesmen 2,00,000
Carriage outward 40,000
Cost of sales 22,60,000
Profi t margin 1,40,000
Sales 24,00,000
Note: Property tax on the plant is to be included under the factory overheads. The tax is paid by
the firm on the plant which is engaged in the production process.
Self Assessment
Fill in the blanks:
5. The factory overheads are nothing but the ...................... incurred at the factory site.
6. The total ...................... incurred in the factory could be derived by adding the both direct
cost and indirect cost incurred during the factory process.
7. The ...................... is the combination of both the factory cost and administrative
overheads.
8. The ...................... is the blend of both, selling overheads and cost of production.
9. The cost of the ...................... is nothing but the direct materials cost of the product.
10. The treatment of the stock of ...................... should carried over in between the opening
stock and closing stock and adjusted among them before the finding the cost of goods
sold.
11. The ...................... are the expenses converting the raw materials into semi-fi nished goods
which should be relatively considered for the treatment of the stock valuation rather than
on the basis of prime cost.
Choose the appropriate answer:
12. Factory cost is the total of
(a) Direct and indirect costs
(b) Product and administrative costs
(c) Cost of sales
(d) Profi t margin
13. Selling price is the summation of
(a) Direct and indirect costs
(b) Product and administrative costs
(c) Cost of sales and profi t margin
(d) Direct materials, direct labour and direct expenses
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