Cost Statement Analysis 2012

Questions and Answers

Which of the following is NOT excluded from the cost sheet?

Discount received

Selling price per unit (correct)

Non-operating income

Advance Tax

Which item is considered a constant variable unless stated otherwise?

Non-operating income

Discount allowed on sales

Total Fixed Cost (correct)

Income tax provision

What does the 'Prime Cost' primarily include?

Selling and distribution overheads

Total fixed costs and variable costs

Office and administration costs

Direct material, direct labor, and direct expenses (correct)

Which of the following is an example of a variable cost?

Cost of raw materials used in production Signup and view all the answers

Which overhead is categorized as selling and distribution?

Sales commissions Signup and view all the answers

What is the total cost of the mixture produced during the year?

₨ 16,89,797 Signup and view all the answers

Which of the following costs are considered when calculating the works cost?

Direct Labour and Factory Supervision Signup and view all the answers

How is the prime cost of the manufactured mixture calculated?

Direct Labour plus raw materials purchased Signup and view all the answers

Which item is NOT included in the total cost calculation?

Sales Returns Signup and view all the answers

What is the value of the finished goods inventory reported?

₨ 80,000 Signup and view all the answers

Which of the following figures represents the direct labour cost?

₨ 1,60,000 Signup and view all the answers

What amount is reflected in the raw materials inventory?

₨ 1,40,000 Signup and view all the answers

Which expense is included under miscellaneous factory expenses?

Miscellaneous Factory Expenses Signup and view all the answers

Which of the following would affect the prime cost calculation?

Direct Labour Signup and view all the answers

What is the total amount spent on factory supervision?

₨ 10,000 Signup and view all the answers

What is the total amount of Raw Materials Consumed?

7,10,000 Signup and view all the answers

What is the total Prime Cost calculated for the year?

16,10,000 Signup and view all the answers

Which of the following is NOT included in the Works/Factory Overheads?

Drawing Office Salaries Signup and view all the answers

Which costs are included in the calculation of total Works/Factory Overheads?

All Indirect Costs and Expenses involving Factory Operations Signup and view all the answers

What would you add to prime cost to arrive at total cost before adjustments?

Works/Factory Overheads Signup and view all the answers

What is the total cost of raw materials consumed?

₹15,20,000 Signup and view all the answers

What is the prime cost reported in the cost statement?

₹17,70,000 Signup and view all the answers

Which of the following contributes most to the total cost of sales?

Cost of Goods Sold Signup and view all the answers

What is the amount added as profit to the total cost of sales?

₹3,06,000 Signup and view all the answers

What is the total cost of sales calculated in the cost statement?

₹17,00,000 Signup and view all the answers

How is the cost per unit of raw materials consumed computed?

₹152.0 Signup and view all the answers

What is the total factory overheads included in works/factory cost?

₹1,20,000 Signup and view all the answers

What is the closing stock of finished goods valued at in the cost statement?

₹3,78,000 Signup and view all the answers

What is the ratio of direct salary to total factory overheads?

2/5 Signup and view all the answers

Which component has the least cost per unit in the prime cost calculation?

Other direct charges Signup and view all the answers

What was the total cost of production for the year 2009?

` 2,34,000 Signup and view all the answers

What was the selling price per unit for the year 2010?

` 31 Signup and view all the answers

How much did direct wages increase by in percentage terms for 2010?

10% Signup and view all the answers

What was the total estimated cost for the year 2010?

` 3,51,000 Signup and view all the answers

What was the profit per unit for the year 2009?

` 8.20 Signup and view all the answers

If production increases by 50% in 2010, how many units are expected to be produced and sold?

15,000 units Signup and view all the answers

What was the estimated profit for the year 2010?

` 1,14,000 Signup and view all the answers

What was the cost per unit for the year 2009?

` 23.40 Signup and view all the answers

Study Notes

Cost Statement Overview

Wastage in raw materials is considered normal; purchase price remained constant throughout 2009.
Finished mixture stock at year-end is valued at factory cost.
Raw materials consumed based on FIFO (First In, First Out) method.

Key Figures from Gogetter Co. (30th September 2012)

Inventories:
- Finished goods: 80,000
- Raw materials: 140,000
- Work-in-progress: 200,000
Sales Revenue:
- Total sales: 768,000
- Sales return & rebates: 14,000
Material Costs:
- Materials purchased: 320,000
- Freight incurred: 16,000
- Purchase returns: 4,800
Labor Costs:
- Direct labor: 160,000
- Indirect labor: 18,000

Prime, Works, and Total Costs

Prime Cost Calculation:
- Direct Materials: 15,200,000
- Direct Wages: 2,00,000
- Other Direct Charges: 50,000
- Total Prime Cost: 17,70,000
Works/Factory Overheads:
- Indirect wages: 20,000
- Factory expenses: 50,000
- Total Factory Cost: 18,90,000
Cost of Production:
- Total cost before closing stock: 19,70,000
- Closing stock of finished goods valued at 378,000
- Cost of goods sold: 15,92,000

Selling and Distribution Costs

Includes various overheads such as:
- Carriage outward: 8,000
- Sales office salary: 40,000
- Trade fair expenses: 20,000
- Total selling and distribution costs: 1,08,000

Final Sales and Profit Calculation

Total cost of sales: 17,00,000
Profit margin: 18%
Profit amount: 3,06,000
Total sales value: 20,06,000

Estimated Costs for 2010

Production increase by 50% estimated; rates for materials & direct wages to rise by 10%.
Expected units produced in 2010: 15,000
Cost per unit in 2009: 23.40
Estimated total cost for 2010: 3,51,000 with cost per unit remaining at 23.40.

American Sprayers Ltd. Overview

Manufactured and sold 1,000 sprayers in the financial year ending 31st March 2010.
Summarized accounts detail the performance of manufacturing, trading, and profit-loss for the year.

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Description

This quiz covers the important aspects of cost statement analysis for Gogetter Co. for the financial year ending 30th September 2012. It covers topics such as inventory valuation, prime costs, and factory overheads, providing insights into material and labor costs for effective financial management.