Cost Sheet
The following are the costing records for the year
2016 of a manufacturer : Production
10000 units, Cost of Raw Materials Rs.200000, Labour Cost Rs120000. Factory Overheads
Rs 80000 Office Overheads Rs.40000, Selling Expenses Rs 10000 Rate of Profit
25% on the Selling Price. The manufacturer decided to produce
15000 units in 2017. It is estimated
that the cost of raw materials will increase by 20% the labour
cost will increase by 10%, 50% of the
overhead charges are fixed and the other 50% are variable. The selling expenses
per unit will be reduced by20%. The
rate of profit will remain the same. Prepare a Cost Statement
for the year 2017 showing the total profit and selling price per unit.
Solution:
Production 10000 units
Cost of Raw Material 200000/10000= 20
Cost of Labour 120000/10000=12
PRIME COST 320000
Factory Overheads 80000 Fixed 40000 Variable 40000 i.e Rs 4
WORKS COST 400000
Office Overheads 40000 -Rs 4
Cost of Production 440000
Selling Expenses 10000 =Rs1
cost of sales 450000/10000=45
Profit (25% of Cost) 125000
Sales 575000/10000=57.5
Now for 15000 units
Figures are as follows
Cost of Raw Material 15000*20=300000+20%=360000
Labour 15000*12= 180000+10%=198000
Factory Overheads 40000+ (15000*4)=100000
Office Overheads 15000*4 = 60000
Selling Expenses 15000* .80p= 12000
Cost of Sales 730000
profit (25% of Sales) 182500
Sales 912500
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