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Particulars Particulars
Unit 5: Basic Cost Concepts
Local raw materials 20,00,000 Excise duty 4,00,000
Imports of raw materials 2,00,000 Administrative office expenses 4,00,000
Direct labour in works 20,00,000 Salary of the managing director 1,20,000
Notes
Indirect labour in works 4,00,000 Salary of the joint managing 80,000
director
Storage of raw materials and 1,00,000 Fees of directors 40,000
spares
Fuel 3,00,000 Expenses on advertising 3,20,000
Tools consumed 40,000 Selling expenses 3,60,000
Depreciation on plant 2,00,000 Sales depots 2,40,000
Salaries of works personnel 2,00,000 Packaging and distribution 2,40,000

Prepare the cost statement in columnar form.
9. How will you visualize the costs of poor product quality, rework, repair, etc.?

10. How would you determine find the cost sheet format of a company and how does it
finalise the product cost?
11. In a cost sheet, should the administration overheads come before or after the adjustments
for the opening and closing stock of finished goods? Support your answer with reason.

Answers: Self Assessment

1. (a) 2. (c)
3. (a) 4. (b)
5. (a) 6. (c)
7. (d) 8. (a)

9. (c) 10. (d)
11. (b) 12. (a)
13. (b) 14. (c)
15. (d)

5.10 Further Readings

Books 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).
R.L. Gupta and Radhaswamy, Advanced Accountancy.
S.N. Maheswari, Management Accounting.
S. Bhat, Financial Management, Excel Books, New Delhi.

V.K. Goyal, Financial Accounting, Excel Books, New Delhi.

Online link www.futureaccountant.com

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