Illustration 1:-

Worl out in cost sheet form the unit cost of production per ton of special paper, manufactured by a
paper mill in June 2006 from the following data;
Direct material
Paper pulp 500 tons @ Rs.50 per ton
Other material 100 tons @ Rs.30 per ton
Direct expenses
Special equipment Rs. 3000
Special Dyes Rs. 1000
Direct Labor
80 skilled men @ Rs. 3 per day for 25 days
40 unskilled men@ Rs. 2 per day for 25 days
Works overhead
Variable @ 100% & fixed @ 60% of direct wages
Administrative overheads @ 10% and selling & distribution overheads @ 15% of the works cost.
400 tons of special paper was manufactured and Rs. 800 was realized by sale of waste material during
the course of manufacturing. The scrap value of the special equipment after utilization in manufacturing
is nil.



























Illustration 2
Te morden manufacturing company submits the following information on 31
st
march 2006.
Sales for the year Rs.275000
Inventories in the beginning of the year:
Work in progress Rs. 4000
Finished goods Rs. 7000

Purchase of materials for the year Rs. 110000

Raw material at the beginning of the year Rs. 3000
Raw material at the end of the year Rs. 4000

Direct labor Rs. 65000
Factory overheads was 60% of the direct labor cost
Inventories at the end of the year:
Work in progress Rs. 6000
Finished goods Rs. 8000
Other expenses of the year;
Selling expenses 10% of sales
Administrative expenses 5% of sales
Prepare the statement of cost.



























ILLUSTRATION 3. From the books of ABS LTD. The following detail has been extracted for the year 2006;
Stock of Material: opening Rs. 188000
Closing Rs. 200000
Material purchased during the year Rs. 832000
Direct wages paid Rs. 238400
Indirect wages Rs. 16000
Salaries to administrative staff Rs. 40000
Freight: Inwards Rs. 32000
: Outwards Rs. 20000
Cash discount allowed Rs. 14000
Bad debt w/o Rs. 18800
Repairs to plant Rs. 42400
Rent, Rates & Taxes: Factory Rs. 12000
: Office Rs. 6400
Travelling Expenses Rs. 12400
Salesmen Salary & Comm. Rs. 33600
Depreciation: plant Rs. 28400
: Furniture Rs. 2400
Director`s Fees Rs. 24000
Electricity charges (factory) Rs. 48000
Fuel (for boiler) Rs. 64000
General charges Rs. 24800
Managers salary Rs. 48000

The manager`s time is shared between factory and the office in the ratio of 20:80. From the above
details you are required to prepare a cost sheet showing a) prime cost b) factory overheads c) general
overheads, and total cost.