COst Accounting Problems

COST ACCOUNTING-MMS

FORMAT OF COST SHEET

Opening stock of Raw Material
XX

Add: Raw material purchased
XX

Less: Closing Stock of Raw Material
XX

Raw Material Consumed
ZZ

Direct Labor
XX

Direct Expenses.
XX

PRIME COST

ZZ
Add: Factory Overheads:

Indirect Material
XX

Indirect Labor
XX

Indirect Expenses
XX

GROSS WORKS COST/FACTORY COST

ZZ
Add: Opening WIP
XX

Less: Closing WIP
XX

COST OF GOODS MANUFACTURED

ZZ
Add: Opening stock of Finished Goods
XX

COST OF GOODS AVAILABLE FOR SALE
Less: Closing stock of Finished Goods
XX

COST OF SALES/COST OF GOODS SOLD

ZZ

FORMAT OF INCOME STATEMENT

Particulars
Amount
Sales

Less: Cost of Goods Sold

Gross Margin

Less: Selling, General and Administrative Overheads

Operating Income

Less:Income Tax

Profit after Tax

1. Alexandria Aluminum Company, a manufacturer of recyclable soda cans, had the following inventory balances at the beginning and end of 2005:

Inventory classification
January1,2005
December31,2005
Raw material
Rs.60,000
Rs.70,000
Work in Progress 1,20,000 1,15,000
Finished goods 1,50,000 1,65,000

During 2005, the company purchased Rs.2,50,000 of raw material and spent Rs.4,00,000 on labour. Manufacturing overheads were as follows:

Indirect material
Rs.10,000
Indirect labour
Rs.25,000
Depreciation on plant and equipment
Rs.100,000
Utilities
Rs.25,000
Other
Rs.30,000

Sales revenue was Rs.11,05,000/- for the year. Administrative and Selling expenses for the year amounted to Rs.1,10,000/- The firm’s tax rate is 40%

Required:

1. Prepare a schedule of cost of goods manufactured
2. Prepare a schedule of cost of goods sold
3. Prepare an income statement.

2. Data pertaining to X Ltd which produces a single product is given as:

Particulars
Units
`
Sales
80,000
800,000
material inventory(1-1-08)

40,000
material