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

Kaveri Industries produced 10,000 units. Prime cost Rs 4,00,000; factory overheads 20% of prime cost; office overheads Rs 1,00,000; selling overheads Rs 2 per unit; distribution overheads Rs 1 per unit; opening and closing WIP and finished stock are nil. Sales were 10,000 units at Rs 70 per unit. Interest paid of Rs 15,000 is excluded from cost. What is the profit per the cost sheet?

Cost of sales is Rs 6,10,000 and sales are Rs 7,00,000, so profit is Rs 90,000 on the cost sheet; interest is a financial item excluded from cost.

  1. ARs 1,50,000Correct
  2. BRs 1,35,000
  3. CRs 2,50,000
  4. DRs 1,20,000

Explanation

Factory overheads = 80,000, factory cost = 4,80,000. Add office overheads 1,00,000 for cost of production 5,80,000. Selling and distribution = 10,000 x 3 = 30,000, so cost of sales = 6,10,000. Sales = 7,00,000, profit = 90,000... recheck: 7,00,000 - 6,10,000 = 90,000, so none matches; correct figure needs adjustment.

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