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CMA Foundation · Fundamentals of Financial and Cost Accounting · Statement of Cost and Profit (Cost Sheet)

A cost sheet gives these figures: cost of production ₹6,40,000, opening finished stock ₹40,000, closing finished stock ₹90,000, selling and distribution overheads ₹70,000. Sales are priced to give a profit of 20% on sales. What is the sales value?

Sales value is ₹8,25,000. Cost of goods sold is ₹5,90,000 after adjusting finished stock, and adding selling overheads gives cost of sales ₹6,60,000. Since profit is 20% of sales, cost equals 80% of sales, so sales equal 6,60,000 divided by 0.8.

  1. A₹8,00,000Correct
  2. B₹7,50,000
  3. C₹8,50,000
  4. D₹7,20,000

Explanation

Cost of goods sold = 6,40,000 + 40,000 - 90,000 = 5,90,000. Adding selling overheads 70,000 gives cost of sales 6,60,000. Profit is 20% of sales, so cost is 80% of sales and sales = 6,60,000/0.8 = 8,25,000. Check: 8,25,000 x 0.8 = 6,60,000.

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