CMA Foundation · Fundamentals of Financial and Cost Accounting · Statement of Cost and Profit (Cost Sheet)
Gupta Metals reports: prime cost ₹5,00,000; factory overheads ₹1,00,000; opening work-in-progress ₹30,000; closing work-in-progress ₹50,000. What is the factory cost (cost of production before adding administration overheads)?
Factory cost equals prime cost plus factory overheads, adjusted for work-in-progress. That is 5,00,000 plus 1,00,000 plus opening WIP 30,000 minus closing WIP 50,000, which gives ₹5,80,000.
- A₹5,80,000Correct
- B₹6,20,000
- C₹6,00,000
- D₹5,60,000
Explanation
Gross factory cost = 5,00,000 + 1,00,000 = 6,00,000. Adjust for work-in-progress: add opening 30,000 and deduct closing 50,000, giving 5,80,000. Ignoring the adjustment gives 6,00,000, and reversing the signs gives 6,20,000.
Did you get it right without looking?
One question tells you little. A timed set on Statement of Cost and Profit (Cost Sheet) shows your real accuracy, how long you take and where you lose marks.
More Statement of Cost and Profit (Cost Sheet) questions
- In a cost sheet prepared for a manufacturing firm, which of the following is correctly classified as part of 'prime cost'?
- Under CAS-based cost sheet treatment, the sale proceeds of normal scrap, where scrap is not separately costed, are generally treated as:
- Gupta Steels has prime cost of ₹6,00,000 and factory overheads of ₹2,00,000. Opening WIP is ₹40,000 and closing WIP is ₹70,000. Scrap sale r…
- Mehta Plastics has works cost of ₹8,00,000, office and administration overheads of ₹90,000, and sold 10,000 units after producing 10,000 uni…
- Sharma Fabrics reports: direct materials Rs 2,40,000; direct wages Rs 1,20,000; direct expenses Rs 20,000; factory overheads Rs 90,000; admi…
- Which of the following items is excluded from a cost sheet because it is a financial item and not a part of cost of production or sales?