Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

sold:;Chapter- (2)                                                                                           

Part- (B)https://www.tipshotels.com/https://www.tipsnews24.com/

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-01. From the following particulars a cost sheet.

Tk

Raw materials used        34,000

Work-in process (1-3-12)                                           5,200

Work-in-process (31-3-12)                                         6,500

Finished goods (1-312)                                              10,000

Finished goods (31-3-12)                                             8,000

Direct wages: 14,000 hours @ Tk 2 per hour

Direct Expenses                                                             5,500

Factory supplies                                                             4,200

Indirect labor                                                                  8,000

Miscellaneous factory expenses                                     5,500

Administrative expenses                                               12,000

Selling expenses                                                           13,000

Profit 15% on sale

[ Ans : 1,30,470 ]

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-02. The following information is obtained form the cost records of a manufacturing company:

Total manufacturing cost                                                                    Tk 2,50,000

Finished goods inventory (closing)                                                             42,000

Cost of finished goods                                                                              2,30,000

Work-in process, (closing)                                                                               20,000

Factory overhead was applied 30% of total manufacturing cost and direct labor cost 15% of factory overhead. Administrative and selling total expenses, amounted to Tk 40,000. Total sales during the period was Tk 2,60,000.

Prepare a cost sheet from the above informations.

[ Ans : 32,000 ]

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-03. As a cost accountant of Meena Ltd. you have collected the following relevant informations:

Direct Materials                                                           Tk 1,00,000

Direct Labour                                                                                 80% of Material

Factory on Cost:                                                                              50% of Direct Labour

Office cost is 75% of factory cost.

Selling on Cost                                                                    50% of Office on Cost

Profit                                                                                  25% of Sales.

Required: (1) Prime cost (2) Factory Cost (3) Cost of production (4) Cost of sales (5) Sales (6) Percentage of total cost of sales on sales.

[ Ans : 75% ]

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-04. The Rico Watch Co. Ltd, manufactures different types of watches. The sales tevenue for the year were Tk 9,45,000. The cost related to production during the year and the inventories in different dates were as follows:

Start of the period                        End of the period

Work-in-process                           Tk 75,000                          Tk 60,000

Finished goods                                   35,000                                     54,000

Direct material purchased during the year wear Tk 2,05,000. Material used in production Tk 1,76,000. Direct labor cost Tk 2,50,000 and factory overhead costs Tk 2,37,500 general and administrative expenses Tk 1,17,000 selling expenses Tk 55,000. Prepare a statement showing (1) Cost of goods manufactured. (2) Cost of goods available for sale. (3) Cost of goods sold. (4) Total Cost of sales and (5) Profit or Loss.

[ Ans: 1,13,500 ]

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-05. Last month cyber Games retailer had total sales of Tfk 29,00,000 selling expenses of Tk 4,20,000 and administrative expenses of Tk 3,60,000. The company had beginning merchandise inventory of Tk 4,80,000 purchased additional merchandise inventory for Tk 19,00,000 and had ending merchandise inventory of Tk 3,40,000.

Required : Prepare an income statement for the company for the month.

[ Ans : 80,000 ]

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-06. Pubali Company manufactures special machines made to customers specification. The following information was available for the month of June-2016.

1st  June (Tk) 30 the June (Tk)
Inventory of material

Work in process

Purchases of materials

Direct  labor cost

Factory overhead

62,000

36,000

70,000

1,01,200

2,00,000

1,65,000

85,800

Required : Prepare a cost of goods manufactured statement for June, 2016.

[ Ans : 3,77,600 ]

 

Exercise-07. The following data are related to the Tazin Company :

 

Inventories                                            Ending                   Beginning

Tk                             Tk

Finished goods                                      96,000                    1,10,000

Worki-in-process                                   80,000                       70,000

Direct materials                                     95,000                       90,000

Costs incurred during the period :           Tk

Cost of goods available for sale         6,84,000

Total manufacturing costs               5,84,000

Factory overhead                               1,67,000

Direct materials used                         1,93,000

Required : (1) Direct labour cost (2) Direct materials purchased during the period.

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-08. Moon star Company provided the data for May, 2012:

Sales Tk 72,000. Marketing expenses Tk 3,600 administrative expenses Tk 72,000 other expenses Tk 360 purchase Tk 36,000 factory expenses Tk 10,000 direct labour Tk 15,000.

Inventories                                                     Baginning (Tk)     Ending ( Tk )

Finished goods

Work-in-process                                                           6,000                       5,000

Materials                                                                                              5,700                     11,600

Required : Cost of goods sold statement.

 

Exercise-09. The following information is obtained from the cost record of ABC manufacturing company :

Tk

Total manufacturing cost                                                                   3,00,000

Closing inventories of finished goods                                                   42,000

Cost of finished goods                                                                       2,80,000

Work-in-progress (Closing)                                                                  20,000

Factory overhead was applied 30% of total manufacturing cost and direct labour cost was 15% of factory overhead. Administative and selling expenses Tk 45,000. Total sales during the period was Tk 3,10,000.

Prepare a cost sheet form the above information.

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-10. The following data are related to Depu Limited :

Inventories                                                                Opening                Ending

Tk                         Tk

Material                                                                      5,000                    3,000

Work-in-process                                                         8,000                    6,000

Finished goods                                                           6,500                     4,500

 

Direct labour TK 7,500, Administrative expense Tk 3,000 Material purchase Tk 40,000. Factory expense Tk 4,000.

Required : Cost of good sold.

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Part- (C)

Exercise-01. The following information is obtained from a manufacturing concern for a year ended 31 st December :

Inventories :                                      1st January                           31st December

Tk                                              Tk

Raw                                                       11,200                                        9,200

Work-in-progress                                   4,300                                         5,200

Finished Stock                                       7,400                                         9,100

Purchase of raw materials            Tk 1,24,000

Direct wages :

Department A-32,000 hours @ Tk  4

Department B-24,000 hours @ Tk 5

Factory overhead :

Fixed- Tk 76,000

Variable-Tk 1.75 per direct labour hour

Administrative expenses- 7.5% of works cost

Selling expenses-60% of administrative expenses.

Net profit 20% of sales

Ascertain works cost, cost of goods finished, total cost of goods sold and sales.

[ Ans :A.M : Tk 5,48,000, T   k 5,47,100, Tk 6,11,160, Tk 7,63,950 ]

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-02. From the following particulars prepare a cost of goods sold statement & net Income for the year.

Inventory of raw materials (1-1-16)                                                     20,000

Inventory of tinished goods (1-1-16)                                                   50,000

Purchase of raw materials                                                                  6,00,000

Wages (9/10 direct)                                                                            4,50,000

Works overhead charges                                                                       70,000

Inventory of raw materials (31-12-16)                                                 15,000

Inventory of finished goods (31=12-10)                                              48,000

Sales of finished goods                                                                    13,52,000

Selling expenses                                                                                    12,000

Administration expenses (10% of works cost )

Sale of scrap                                                                                            1,000

[ Ans : Cost of goods sold Tk 11,26,000.]. [Net Income: Tk 1,0.1,600 ]

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-03. Various cost and sales data for Medco, Inc. are given below for the year 2016.

Purchases of raw materials

Raw materials inventory, January-1

Radw materials inventory, December 31 Depreciation. factory

Insurance, factory

Direct labour cost

Maintenance, factory

Administrative expenses

Sales

Utilities, factory

Supplies, factory

Selling expenses

Indirect labour

Work in process inventory, January-1

Work in process inventory, December 31

Finished goods inventory, January 1

Finished goods inventory, December 31

Tk 90,000

10,000

17,000

42,000

5,000

60,000

30,000

70,000

4,50,000

27,000

1,000

80,000

65,000

7,000

30,000

10,000

40,000

Required:

  • Prepare a cost of goods sold statement, and
  • Prepare an income statement for 2012.

[ Ans : Tk 2,60,000, (2) Tk 40,000 ]

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-04. Fazell Company, a manufacturing firm, has supplied the following information from its for the last calendar year.

Direct labour cost: Tk  2,40,000

Purchases of direct material: 95,000

Freight-in on materials: 1,000

Factory supplies used: 3,570

Factory insurance:

Commission paid                                                                  35,000

Factory supervision and indirect labour: 1,60,300

Advertising                                                                           24,000

Material handling F.O.H                                                       26,750

Work in inventory. January-1 1                                             2,17,000

Work in inventory, December 31

Direct material inventory: January-1                                     16,000

Derect material inventory, Kecember 31

Finished goods inventory, January-1 1: 56,000

Finished goods inventory, December 31: 37,000

Required :

  • Prepare a cost of goods manufactured statement.
  • Prepare a cost of goods sold statement.

[ Ans : (1) Tk 6,33,620; (2) Tk 6,52,620 ]

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-05. Following data are collected from the records of a manufacturing concern,

Raw material used                                                                 Tk 3,200

Work-in process (1-3-16)                                                           5,200

Work-in process (31-3-16): 6,500

Finished goods (1-3-16)

Finished good (31-3-16): 8,070

Direct wages : 1,400 hours @ Tk 2 per hour

Direct expenses: 7,200

Indirect materials (Factory): 4,200

Indirect labour (Factory): 9,100

Factory miscellaneous Expenses: 7,300

Administrative expenses:

Fixed                                                                                           6,000

Variable-10% prime cost

Selling expenses : $3,000

Fixed

Variable 5% of cost of goods manufactured

Profit 15% on sales

Prepare a statement showing the following : Prime cost , Manufacturing cost of goods manufactured, cost of goods sold, total cost, and sales.

[ Ans : (1) 13,200; (2) 33,800; (3) 32,500; (4) 38,130; (4) 59,244 ]

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise- 06. The Noor Chemical Companystarted production from 1st January. From the following particulars obtained from the books of account, calculate cost of materials and prepare a cost sheet showing cost of goods sold and nett profit

Taka

Total Manufacturing Cost (Works Cost):

Direct wages paid: 72,500

Sales                                                                                           2,67,000

Administrative expenses:

Selling and Distribution expenses: 11,300

Direct wages accrued:

Work-in-progress, 31st December.                                                15,000

Finished goods, 31st December, 22,000

Factory Overhead constitutes 120% of the direct labour cost.

[Ans : Tk 1,05,000 Tk 2,33,000 Tk 2,700 ]

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-07. From the following particulars, prepare a statement showing the cost of goods, total cost and sales :

Inventories at the beginning :

Tk

Raw materials                                                           6,050

Work-in process: 5,100

Finished goods: 6,500

Diret wages:

Raw materials purchased:

Factory overhead : 2/3 rds of direct wages

Administrative expenses : 20% of works cost

Selling expenses : 5% of sales

Profit: 15% of sales.

Inventories at the end :

Raw materials: 4,500

Work-in process:

Finished goods: 7,500

[ Ans : A.M : Tk 33,550,  Tk  42,712.5, Tk 50,250 ]

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-8. From the following particulars, prepare a statement showing (a) Works cost (b) Cost of goods manufactured (c) Cost of goods sold (d) Total cost of sales and (e) Profit :

Opening                      Closing

Stocks on hand :                                         Tk                                  Tk

Raw materials                                          7,400                               8,600

Work-in-process                                     12,300                             16,000

Finished goods                                       11,500                               9,700

Factory supplies                                       2,400                               3,000

Packing materials                                     2,000                               1,800

Purchases :

Paw materials                                                                            64,000

Factory supplies                                                                          6,000

Packing materials                                                                        4,000

Direct labour                                                                             45,300

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Factory expenses                                                                         9,600

Depreciation of Machinary                                                         5,400

Office expenses: 3,500

Distribution charges: $3,000

Selling expenses: 4,200

Managing Director’s remuneration: 7,500

Sales Manager’s remuneration: 6,000

Sales                                                                                      1,68,000

[ Ans : (a) Tk 1,28,500; (b) Tk 1,24,800; (c) Tk 1,26,600; (d) Tk 1,55,000; (e) Tk 13,000 ]

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-09. The cost records of a manufacturing concern showed the following balances :

1st January               31st December

Tk                                  Tk

Raw materials                                        12,000                           9,000

Work-in-progress: 21,900     19,500

Finished goods (120 units): 32,400 ?

Further information relating to the year is as follows :

Raw materials purchased:                                                     1,62,200

Conversion cost:                                                                         2,12,000

Sales ( 1,500 units including opening stock )                         4,44,000

Finished goods on hand at close are 80 units 60% of the conversion cost constitutes direct wages. Administrative expenses are 25% of factory overhead and selling expenses 4% of sales/

You are required to calculate the number of units produced and the value of closing stock. Also prepare a statement showing the cost of goods sold and the nett profit.

[Ans : A.M : Tk 20,800 Tk 3,91,200  Tk 13,840 ]

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-10. The Apex Company produce different types of leather goods. The sales revenue for the year was Tk 12,00,000. The cost-related different information during the year were as follows :

Particulars                                                                                            Tk

Raw material purchased: $50,000

Freight in                                                                                                   2,000

Opening work-in-process                                                                        80,000

Opening finished goods                                                                          40,000

Opening raw materials                                                                         2,50,000

Closing work-in-process                                                                         70,000

Closing finished goods                                                                           60,000

Closing Raw materials                                                                            60,000

Productive wages                                                                                 1,70,000

Changeable expenses                                                                              50,000

Factory overhead: 2,50,000

Selling expenses:

General and administrative expenses                                                        10,000

Sale of scrap                                                                                              5,000

Prepare a statement showing the following:

  • Raw material used. (2) Prime cost (3) Cost of manufacturing (4) Cost of goods manufactured (5) Cost of goods available for use (6) Cost of goods sold (7) Cost of sales (8) Profit of loss.

 

Exercise-11. A manufacturing company produces bicycles. The company had 260 units of opening inventory costing Tk 700 per unit in 2014.

During the year 2014, the company sold 2,150 bicycles at a gross profit of 20% on sale. The cost of material per unit was Tk 420. Direct labour cost per bicycle was 40 hours at Tk 4 per hour. Factory overhead was charged at Tk 5 per direct labour hour. Administrative and selling expenses amounted to Tk 1,20,000. The finished inventory at close was 110 units.

Prepare :

  • Statement of cost of goods sold.
  • Income statement.

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-12. The following data relate to XYZ Ltd :

Detsils Tk

Inventory of finished goods 01-01-2014                                                       70,800

Inventory of raw materials 01-01-2014                                                    33,280

Purchase of raw materials                                                                         7,59,200

Productive wases: 5,16,880

Sales of finished goods /sales

Inventory of finished goods: 31-12-2014: 78,000

Inventory of raw materials 30-12-2014                                                    35,360

Work manager’s salary: $50,000

Indirect wages:

Fuel                                                                                                           15,000

Depreciation of plant                                                                                15,000

Indirect raw materials                                                                               10,000

Tools used in production                                                                          98,220

Administrative expenses                                                                                30,161

Salary to the managing director: 40,000

Required :

  • Prepare a cost sheet for the year.
  • Compute total cost of a plant and find out the price of a tender for another plant to be submitted. It is estimated that the cost of raw materials required for the tender will be Tk 52,000 and direct wages Tk 31,200. The tender is to be made at a profit of 20% on selling price.

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-13. Selected account balances for the year ended December 31 are provided below for salkat Company.

Selling and administrative salaries                                                    Tk 1,10,000

Purchases of raw materials                                                                 Tk 2,29,000

Direct labour                                                                                                              ?

Advertising expense: Tk 80,000

Manufacturing overhead: Tk 2,70,000

Sales commissions: Tk 50,000

Inventory balances at the beginning and end of the year were as follows:

Beginning of the Year               End of the year

Raw materials                                                Tk 40,000; Tk 10,000

Work in process                                                    ?                               Tk 35,000

Finished goods                                               Tk 50,000                               ?

The total manufacturing costs for the year were Tk 6,83,000, the goods available for sales totalled Tk 7,40,000 and the cost of goods sold totalled Tk 6,60,000.

Required :

  • Prepare a schedule of cost of goods manufactured and the cost of goods sold section of the company’s income statement for the year.
  • Assume that the amounts given above are for the equivalent of 40,000 units produced during the year. Compute the average cost per unit for direct materials used and the average cost per unit for manufacturing overhead.

[ Ans : (1) 6,90,000; (2) 6,60,000  ]

 

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-14. From the following particulars of Kader Manufacturing Company, prepare (1) Statement of cost of goods sold and (2) an income statement for the year ended 31st December 1999

Tk

Purchase of raw material: 2,60,000

Sales                                                                                                    7,50,000

Direct labour                                                                                           95,000

 

Inventory on 1st January 1999

Raw material                                                                                                                  45,000

Work-in-progress                                                                                1,55,000

Finished goods:

 

Inventory on 31st December, 1999

Raw material                                                                                                       ?

Work-in-progress                                                                                         ?

Finished goods: 52,000

Purchase returns

Sales returns

 

Factory supplies :

Purchase                                                                                                  6,000

Opening inventory:

Closing inventory:

Indirect labour

Office expenses:

Sales expenses

Heat, light and power                                                                                                           25,000

 

Depreciation :

Factory building                                                                                    12,000

Machinery                                                                                             27,000

Property taxes (75% Factory  10% to office and 15% to sales )            6,000

Repair and maintenance:  10,000

Raw materials used                                                                            2,56,000

Insurance (50% Factory 25% office and 25 % to selling )                   12,000

Cost of goods sold                                                                                                  4,75,000

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Exercise-15. The following particulars are extracted from the books of A Engineering company :

Tk

Inventory of Finished goods (1-1-2018)                                                  28,000

Inventory of raw materials (1-1-2018)                                                      12,800

Inventory of finished goods (31/12/2018)                                                30,000

Inventory of raw materials (31-12-2018)                                                  13,600

Purchase of raw materials                                                                          2,92,000

Direct wages: 1,98,800

Works overhead charges: 43,736

Administrative and selling overhead                                                            88,950

Sales of finished goods: 5,92,000

From the above paragraphs, prepare a statement showing

  • The cost of materials used
  • Prime cost
  • The work cost
  • Total cost
  • The percentage of works overhead to productive wages and
  • The percentage of administration and selling overhead to works cost.
  • The Company estimates the cost of a tender, which costs materials of Tk 20,000 and direct wages of Tk 12,000. The tender is to be made at a nett profit of 20% on the selling price. Statement the amount of the tender price on the basis of above information.

[Ans : (a) 2,91,200; (b) 4,90,000; (c) 6,20,686; (e) 22%; (f) 16,67%; (g) 50,518 ]

 

Exercise-16. The particulars of a completed job are as follows:

Direct materials 1,200 kgs @ Tk 15

Direct labour: 750 hours @ Tk 4

Cost Concepts and Classifications [ব্যয়ের ধারণা ও শ্রেণীবিভাগ]

Fixed overhead TK 2.40 per direct labour Variable overhead 80% of direct labour cost.

selling price of the job is Tk 32,760.

It is necessary to quote the price of a new job, which require 20% more materials and 30% more labour hours to complete. The price of materials and the labour hour have increased by 10%  and 15%, respectively.

What price should be quoted for the new job for earning the same percentage profit on cost?

[ Ans : 43,723 ]

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