Statement
of Cost: It is prepared when volume of production is not given. It shows the
cost of production and profit and loss. It does not help to determine the cost
per unit and each element of cost. It is not used to compare the product cost
statement.
Example: Find out the total cost
of product A with the help of given information:
|
Particulars |
Amount |
|
Raw Material |
52,000 |
|
Direct wages |
12,000 |
|
Supervision cost |
60,000 |
|
Rent of office building |
26,500 |
|
Selling and distribution cost |
15,000 |
|
Profit @20% cost of sales |
|
Solution: Statement of Cost
For the year ended....
|
Particulars |
Amount (Rs.) |
|
Raw material
52,000 |
|
|
Add: Direct wages 12,000
|
|
|
Prime cost |
64,000 |
|
Add: supervision cost |
60,000 |
|
Factory Cost |
1,24,000 |
|
Add: rent of office building |
15,000 |
|
Office cost or cost of
production |
1,39,000 |
|
Add: selling and distribution |
15,000 |
|
Cost of sales |
1,54,000 |
|
Add: Profit @ 20%
1,54,000*0.20 |
30,800 |
|
Sales |
1,84,800 |
Example:
Find out
·
Material consumed
·
Cost of
production
With the help of given information:
|
Particulars |
Amount (Rs) |
|
Opening stock of raw material |
45,000 |
|
Purchase raw material |
18,000 |
|
Closing stock of
raw material |
8,000 |
|
Scrap of raw material |
6,200 |
|
Wages |
22,000 |
|
Opening stock of finished goods |
5,000 |
|
Auditors fee |
42,000 |
|
Rent on factory machines |
21,000 |
|
Selling and distribution expenses |
35,000 |
|
Advertisement expenses |
26,000 |
|
Closing stock of finished goods |
9,000 |
|
Office stationery |
4,000 |
|
Sale of finished goods |
2,78,000 |
Solution:
Statement of Cost
For the year ending ....2021
|
Particulars |
Amount (Rs) |
|
Opening stock of raw material 45,000 |
|
|
Add: Purchase raw material + 18,000 |
|
|
Less: Closing stock
of raw material 63,000 8,000 |
|
|
Less: Scrap of raw material +6,200 |
|
|
a)
Material consumed |
48,800 |
|
Add: Wages |
22,000 |
|
Prime cost |
70,800 |
|
Add: Rent on factory machines |
21,000 |
|
Factory cost |
91,800 |
|
Add: office cost
42,000 |
|
|
Add: Office stationery 4,000 |
46,000 |
|
Cost of production or total
cost |
1,37,800 |
|
Add: Opening stock of finished goods |
5,000 |
|
Less: Closing stock of finished goods |
9,000 |
|
Cost of goods sold |
1,33,800 |
|
Add: Selling and distribution expenses 35,000 |
|
|
Add: Advertisement expenses 26,000 |
61,000 |
|
Cost of sales |
1,94,800 |
|
Add: Profit |
83,200 |
|
Sales |
2,78,000 |
Example: Find out the sales value of product and factory cost with the help of given information:
|
Particulars |
Amount (Rs.) |
|
Raw material |
72,000 |
|
Opening stock of finished goods |
12,000 |
|
Closing stock of finished goods |
8,000 |
|
Factory Supervision
cost |
52,000 |
|
Rent and stationery expenses of office |
32,000 |
|
Wages |
26,200 |
|
Opening stock of work in progress |
6,800 |
|
Closing stock of work in progress |
6,600 |
|
Dividend received |
9,500 |
|
Interest received |
5,000 |
|
Packaging of finished goods |
14,000 |
|
Advertisement expenses |
21,000 |
|
Profit 30% on sales |
|
Solution:
Statement of cost
For the year ending ....2021
|
Particulars |
Amount (Rs.) |
|
Raw material |
72,000 |
|
Add: Wages |
26,200 |
|
Prime cost |
98,200 |
|
Add: Factory Supervision
cost 52,000 |
|
|
Add: Opening stock of work in progress 6,800 58,800 |
|
|
Less: Closing stock of work in progress 6,600 |
52,200 |
|
Factory cost |
1,50,400 |
|
Add: Rent and stationery expenses of office |
32,000 |
|
Office cost or cost of
production cost |
1,82,400 |
|
Add: Opening stock of finished goods |
12,000 |
|
Less: Closing stock of finished goods |
8,000 |
|
Cost of goods sold |
1,86,400 |
|
Add: Packaging of finished goods 14,000 |
|
|
Add: Advertisement expenses 21,000 |
35,000 |
|
Cost of sales |
2,11,400 |
|
Profit 30% on cost of sales |
63,420 |
|
Sales |
2,74,820 |
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