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Unit 2: Unit and Output Costing

9. From the following information, prepare the balance sheet from the cost records of Aditya Notes
Chemicals Ltd. for 2003.
Particulars `
`
Finished goods 50,000
Raw material 10,000
Work in progress 14,000
Direct labour 1,60,000
Purchase of raw material 98,000
Indirect labour 40,000
Heat, light and power 20,000
Factory, Insurance and Taxes 5,000
Repairs to plant 3,000
Factory supplies 5,000
Depreciation –factory building 6,000
Depreciation –plant 10,000
Factory cost of goods produced in 2003 2,80,000
Raw material consumed in 2003 95,000
Cost of goods sold in 2003 1,60,000

No office and administration expenses were incurred during the year 2003. Prepare a
statement of cost for the year ending 2003 giving maximum possible information and its
break up.
10. Discuss analytically, direct and indirect costing.

Answers: Self Assessment

1. cost centre 2. Cost Accounting
3. (d) Prime cost 4. (d) Direct materials, direct labour and
direct expenses
5. indirect costs 6. factory cost or works cost
7. cost of production 8. cost of sales
9. raw materials 10. fi nished goods

11. indirect expenses 12. (a) Direct and indirect costs

13. (c) Cost of sales and profit margin 14. (b) Product and administrative costs
15. (d) None of these

2.7 Further Readings

Books I.M. Pandey, Financial Management, Vikas Publishing, New Delhi.

Khan and Jain, Management Accounting.
Nitin Balwani, Accounting & Finance for Managers, Excel Books, New Delhi.
Prasanna Chandra, Financial Management - Theory and Practice, Tata McGraw Hill,
New Delhi (1994).

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