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

Sharma Ltd has cost of production of ₹5,00,000 for the period. Opening finished goods stock is ₹60,000 and closing finished goods stock is ₹85,000. Administration overheads are ₹40,000 and selling and distribution overheads are ₹30,000. What is the cost of sales?

Cost of sales is ₹5,45,000. Cost of production of ₹5,00,000 plus opening stock ₹60,000 less closing stock ₹85,000 gives ₹4,75,000, and adding administration ₹40,000 and selling and distribution ₹30,000 gives the total.

  1. A₹5,45,000Correct
  2. B₹5,15,000
  3. C₹5,95,000
  4. D₹5,05,000

Explanation

Cost of goods sold = 5,00,000 + 60,000 - 85,000 = 4,75,000. Add administration overheads 40,000 = 5,15,000. Add selling and distribution 30,000 = 5,45,000. Option B stops before selling overheads.

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