Page 102 - DMGT403_ACCOUNTING_FOR_MANAGERS

Particulars
Direct Materials
Direct wages
50,000
Direct expenses
10,000
2,60
Prime Cost 2,00,000 ,000
Factory Overheads:
Wages of foreman 5,000
Electric power 1,000
Unit 5: Basic Cost Concepts
Lighting : Factory 3,000
Storekeeper’s wages 2,000
Oil and water 1000
Notes
Rent: Factory 10,000
Depreciation Plant 1000
Consumable store 5,000
Repairs and Renewal Plant 7,000 35,000
Factory Cost ,000
2,95
Administration Overheads:
Rent Office 5,000
Depreciation office 2,500
Managers’ salary 10,000
Directors’ fees 2,500
Office stationery 1,000
Telephone charges 250
Postage and telegrams 500
Office premises 1,000
Lighting: Office 1,000 23,750
Cost of production 3,18,750
Selling and distribution overheads:
Carriage outward 750
Salesmen’s salaries 2500
Travelling expenses 1,000
Advertising 2500
Warehouse charges 1000
7,750
Cost of Sales 3,26,500
Profit 52,500
Sales 3,79,000

The next stage in the preparation of the cost statement is to induct the stock of raw materials,
work in progress and finished goods.

5.2.3 Stock of Raw Materials

The raw materials stock should be taken into consideration for the preparation of the cost sheet.
The cost of the raw materials is nothing but the direct materials cost of the product. The cost of
the materials is in other words cost of the materials consumed for the production of a product.
Particulars
Opening stock of raw materials XXXXX
(+) Purchases of raw materials XXXXX
XXXXX
(–) Closing stock of raw materials XXXXX
Cost of materials consumed XXXXX

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