Question

Prepare a statement of cost showing:

(a) value of materials consumed (b) total cost of production (c) cost of goods sold and (d) the amount of profit From the following details relating to a toy manufacturing concern:

Opening stock: raw materials                                25,000

Finished goods                                                          20,000

Raw materials purchased                                   2, 50,000

Wages paid to laborers 1, 00,000

Closing stock: raw materials                                   20,000

Finished goods                                                           25,000

Chargeable expenses                                                10,000

Rent, rates, and taxes (factory)                                25,000

Motive power                                                             10,000

Factory heating and lighting                                    10,000

Factory insurance                                                        5,000

Experimental expenses                                             2,500

Waste materials in factory                                        1,000

Office salaries                                                            20,000

Printing and stationery                                              1,000

Salesmen’s salary                                                     10,000

Commission to traveling agents                              5,000

Sales                                                                        5, 00,000

Answer 1

Raw Material consumed:
	Amount
Opening Stock of RM	25000
Add:RM purchased	250000
Less:Closing Stock of RM	20000
RM Consumed	255000
total cost of Production:
RM Consumed	255000
Add: Wages paid to laborers	100000
Add: Production Overheads:
Chargeable expenses	10000
Rent, rates and taxes Factory	25000
Motive power	10000
Fact. Heating and lighting	10000
Factory insurance	5000
Experimental expenses	2500
Waste materials in factory	1000
Total overheads	63500
Total Production costs	418500
Cost of Goods Sold:
Total Production costs	418500
Add:Opening Stock of FG	20000
Less: Closing Stock of FG	25000
Cost of Goods Sold	413500
Income Statement:
Sales	500000
Less: COGS	413500
Gross Profit	86500
Less: Admin & Selling expenses:
Office salaries	20000
Printing and stationery	1000
Salesmen's salary	10000
Commission to traveling agents	5000
Total Admin & Selling exp.	36000
Income from Operation	50500