Presentation Transcript

1. Identify the following overheads as Factory, Administration and Selling & Distribution overheads. Lighting of office Interest on debentures Agent’s Commission Warehouse wages Warehouse repairs Office salaries Director’s Remuneration Travelling expenses of salesman Rent, rates and insurance of warehouse Rent rates and insurance of office Lighting of warehouse Printing and stationery Trade Magazine Donations Bank Charges Bad debts
2. Prepare a cost sheet
3. Prime Cost 2,44,500 Factory overheads 47,290 Factory cost 2,91,790 Administrative overheads 24,700 Cost of production 3,15,090 Selling and distribution OH 16,200 Cost of sales 3,32,690
4. Prime cost 3,00,000 Factory cost 3,86,700 Cost of production 4,31,900 Profit 23,440
5. The following figures were extracted from the records of a factory for the month of August ’10
6. Q1 Nina Ltd. manufactures 5,000 units of its product at a cost of Rs.120 per unit. Presently, the company is utilizing 50% of the total capacity. The information pertaining to cost per unit of the product is as follows: Material cost – Rs.40 Labor cost – Rs.30 Factory overhead costs – Rs.20 (40% fixed) Administrative overhead costs – Rs.30 (80% fixed) Other information: i. The current selling price of the product is Rs.160 per unit. ii. At 60% capacity level – Current material cost per unit will increase by 4% and current selling price per unit will reduce by 5%. iii. At 90% capacity level – Current material cost per unit will reduce by 2% and current selling price per unit will reduce by 8%. The profit per unit of the product of the company at 60% and 90% capacity levels will be