Cost Sheet – CA Inter Costing Study Material

Cost Sheet – CA Inter Costing Study Material is designed strictly as per the latest syllabus and exam pattern.

Cost Sheet – CA Inter Costing Study Material

Theory Questions

Question 1.
State the names of cost heads in a cost sheet on the basis of functions and define all the cost heads. [ICAI Module]
Answer:
The costs as classified on the basis of functions are grouped into the following cost heads in a cost sheet:
(i) Prime Cost
(ii) Cost of Production
(iii) Cost of Goods Sold
(iv) Cost of Sales

(i) Prime Cost:
Prime cost represents the total of direct materials costs, direct employee (labour) costs and direct expenses.

(ii) Cost of Production:
It is the total of prime cost and factory related costs and overheads.

(iii) Cost of Goods Sold:
It is the cost of production for goods sold.

(iv) Cost of Sales:
It is the total cost of a product incurred to make the product available to the customer or consumer.

Question 2.
Explain Direct Expenses and how these are measured and their treatment in cost accounting. [CA Inter May 2019, 5 Marks]
Answer:
Direct Expense are the expenses other than direct material cost and direct employee cost, which are incurred to manufacture a product or for provision of service and can be directly traced in an economically feasible manner to a cost object.

Some examples for direct expenses:

• Royality paid/payable for production or provision of service;
• Hire charges paid for hiring specific equipment;
• Cost for product/service specific design or drawing;

Measurement of Direct Expenses:
The direct expenses are measured at invoice or agreed price net of rebate or discount but includes duties and taxes (for which input credit not available), commission and other directly attributable costs.

Treatment of Direct Expenses:
Direct Expenses forms part the prime cost for the product or service to which it can be directly traceable and attributable. In case of lump-sum payment or one time payment, the cost is amortised over the estimated production volume or benefit derived. If the expenses incurred are of insignificant amount i.e. not material, it can be treated as part of overheads.

Question 3.
Prepare format of cost sheet for a manufacturing entity. [ICAIModule]
Answer:
Specimen Format of Cost Sheet for a Manufacturing entity

Question 4.
State the advantages of cost sheet.
Answer:
The main advantages of a Cost Sheet are as follows:

• It provides the total cost figure as well as cost per unit of production.
• It helps in cost comparison.
• It facilitates the preparation of cost estimates required for submitting tenders.
• It provides sufficient help in arriving at the figure of selling price.
• It facilitates cost control by disclosing operational efficiency.

Question 5.
What will be the treatment of following items of cost in cost sheet/ statement?
(i) Abnormal costs
(ii) Subsidy/Grant/Incentives
(iii) Penalty, fine, damages and demurrage
(iv) Interest and other finance costs [ICAI Module]
Answer:
(i) Abnormal costs: Any abnormal cost (material and quantifiable) shall not form part of cost of production or acquisition or supply of goods or provision of service.

(ii) Subsidy/Grant/Incentives: It wall be reduced from the cost objects to which such amount pertains.

(iii) Penalty, fine, damages, and demurrage: Such expenses do not form part of cost.

(iv) Interest and other finance costs: Interest, including any payment in the nature of interest for use of non-equity funds and incidental cost that an entity incurs in arranging those funds shall not be included in cost of production.

Practical Questions

Question 1.
Following information relate to a manufacturing concern for the year ended 31st March, 2021:

	₹
Raw Material (opening)	2,28,000
Raw Material (closing)	3,05,000
Purchases of Raw Material	42,25,000
Freight Inwards	1,00,000
Direct wages paid	12,56,000
Direct wages outstanding at the end of the year	1,50,000
Factory Overheads	20% of prime cost
Work in progress (opening)	1,92.500
Work in progress (closing)	1,40,700
Administrative Overheads (related to production)	1,73,000
Distribution Expenses	₹ 16 per unit
Finished Stock (opening)  1,217 Units	6,08,500
Sale of scrap of material	8,000

The firm produced 14,000 units of output during the year. The stock of finished goods at the end of the year is valued at cost of production. The firm sold 14,153 units at a price of ₹ 618 per unit during the year.
Prepare cost sheet of the firm. [CA Inter May 2018, 10 Marks}
Answer
Cost sheet for the year ended 31st March, 2021.
Units produced – 14,000 units
Units sold – 14,153 units

Closing stock of units = 1,217 + 14,000 – 14,153 = 1,064 units
Closing stock value = ₹ 500 (70,00,000/14,000) × 1,064 = ₹ 5,32,000

Question 2.
M/s Areeba Private Limited has a normal production capacity of 36,000 units of toys per annum. The estimated costs of production are as under:
(i) Direct Material ₹ 40 per unit
(ii) Direct Labour ₹ 30 per unit (subject to a minimum of ₹ 48,000 p.m.)
(iii) Factory Overheads:
(a) Fixed ₹ 3,60,000 per annum
(b) Variable ₹ 10 per unit
(c) Semi-variable ₹ 1,08,000 per annum up to 50% capacity and additional ₹ 46,800 for every 20% increase in capacity or any part thereof.
(iv) Administrative Overheads ₹ 5,18,400 per annum (fixed)
(V) Selling overheads are incurred at ₹ 8 per unit
(vi) Each unit of raw material yields scrap which is sold at the rate of ₹ 5 per unit.
(vii) In year 2019, the factory worked at 50% capacity for the first three months but it was expected that it would work at 80% capacity for the remaining nine months.
(viii) During the first three months, the selling price per unit was ₹ 145.
You are required to
(i) Prepare a cost sheet showing Prime Cost, Works Cost, Cost of Production and Cost of sales.
(ii) Calculate the selling price per unit for remaining nine months to achieve the total annual profit of ₹ 8,76,600. [CA Inter May 2019, 10 Marks]
Answer:
(i) Cost Sheet of M/s Areeba Pvt. Ltd. for the year 2021.
Normal Capacity: 36,000 units p.a.

Working Note:

Calculation of Costs

	For 4,500 units (₹)	For 21,600 units (₹)
Material	1,80,000 (₹ 40 × 4,500 units)	8,64,000 (₹ 40 × 21,600 units)
Wages	1,44,000 (Max. of ₹ 30 × 4,500 units = ₹ 1,35,000 and ₹ 48,000 × 3 months = ₹ 1,44,000)	6,48,000 (21600 Units × 30)
Variable Cost	45,000 (₹ 10 × 4,500 units)	2,16,000 (₹ 10 × 21,600 units)
Semi variable Cost	27,000(1,08,000/12 × 3)	1,51,200 (1,08,000/12 × 9) + 46,800 (for 20% increase) + 23,400 (for 10Qo increase)
Selling Overhead	36,000 (₹ 8 × 4,500 units)	1,72,800 (₹ 8 × 21,600 units)

Notes:
1. Alternatively scrap of raw material can also be reduced from Work cost.
2. Administrative overhead may be treated alternatively as a part of general overhead. In that case, Works Cost as well as Cost of Production will be same i.e. ₹ 4,63,500 and Cost of Sales will remain same as ₹ 6,29,100.

(ii) Calculation of Selling price for nine months period

	₹
Total Cost of sales (₹ 6,29,100 + ₹ 26,02,800)	32,31,900
Add: Desired profit	8,76,600
Total sales value	41,08,500
Less: Sales value realised in first three months (₹ 145 × 4,500 units)	(6,52,500)
Sales Value to be realised in next nine months	34,56,000
No. of units to be sold in next nine months	21,600
Selling price per unit (₹ 34,56,000 ÷ 21,600 units)	160

Question 3.
XYZ a manufacturing firm, has revealed following information for September, 2020:

	1st September ₹	30th September ₹
Raw Materials	2,42,000	2,92,000
Works in progress	2,00,000	5,00,000

The firm incurred following expenses for a targeted production of 1,00,000 units during the month :

Consumable Stores and spares of factory	₹ 3,50,000
Research and development cost for process improvements	₹ 2,50,000
Quality control cost	₹ 2,00,000
Packing cost(secondary) per unit of goods sold	₹ 2
Lease rent of production asset	₹ 2,00,000
Administrative Expenses (General)	₹ 2,24,000
Selling and distribution Expenses	₹ 4,13,000
Finished goods (opening)	Nil
Finished goods (closing)	5000 units

Defective output which is 4% of targeted production, realizes ₹ 61 per unit. Closing stock is valued at cost of production (excluding administrative expenses)
Cost of goods sold, excluding administrative expenses amounts to ₹ 78,26,000
Direct employees cost is 1 /2 of the material consumed.
Selling price of the output is ₹ 110 per unit
You are required to
(i) Calculate the Value of material purchased
(ii) Prepare cost sheet showing the profit earned by the firm. [CA Inter Nov. 2019, 10 Marks]
Answer:
(i) Calculation of Value of Materials Purchased
Let Cost of Material Consumed be M and labour cost be 0.5M
Prime Cost = Cost of Material Consumed + Labour Cost
78,00,000 = M + 0.5M
M = 52,00,000
Therefore, Cost of Material consumed is ₹ 52,00,000 and labour cost is ₹ 26,00,000.

	₹
Cost of Material Consumed	52,00,000
Add: Value of Closing stock	2,92,000
Less: Value of Opening stock	(2,42,000)
Value of Materials Purchased	52,50,000

(ii) Cost Sheet

Working Notes:
1. Calculation of Sales Quantity

	Units
Production units	1,00,000
Less: Defectives (4% × 1,00,000 units)	4,000
Less: Closing stock of finished goods	5,000
No. of units sold	91,000

2. Calculation of Cost of Production

	₹
Cost of Goods sold (given)	78,26,000
Add: Value of Closing finished goods (₹ 78,26,000 × 5,000 units/91,000 units)	4,30,000
Cost of Production	82,56,000

3. Calculation of Factory Cost

	₹
Cost of Production	82,56,000
Less: Quality Control Cost	(2,00,000)
Less: Research and Development Cost	(2,50,000)
Add: Credit for Recoveries/Scrap/By Products/ misc. income (1,00,000 units × 4% × ₹ 61)	2,44,000
Factory Cost	80,50,000

4. Calculation of Gross Factory Cost

	₹
Cost of Factory Cost	80,50,000
Less: Opening Work in Process	(2,00,000)
Add: Closing Work in Process	5,00,000
Cost of Gross Factory Cost	83,50,000

5. Calculation of Prime Cost

	₹
Cost of Gross Factory Cost	83,50,000
Less: Consumable stores & Spares	(3,50,000)
Less: Lease rental of production assets	(2,00,000)
Prime Cost	78,00,000

Question 4.
Popeye Company is a metal and wood cutting manufacturer, selling, products to the home construction market. Consider the following data for the month of October 2020:

	₹
Sandpaper	5,000
Material handling costs	1,75,000
Lubricants and Coolants	12,500
Miscellaneous indirect manufacturing labour	1,00,000
Direct manufacturing labour	7,50,000
Direct materials, October 1, 2020	1,08,000
Direct materials, October 31, 2020	1,25,000
Finished goods, October 1, 2020	2,50,000
Finished goods, October 31, 2020	3,75,000
Work-in-process, October 1, 2020	25,000
Work- in-process, October 31, 2020	35,000
Plant-leasing- costs	1,35,000
Depreciation-plant equipment	90,000
Property taxes on plant equipment	10,000
Fire insurance on plant equipment	7,500
Direct materials purchased	11,50,000
Sales revenues	34,00,000
Marketing promotions	1,50,000
Marketing salaries	2,50,000
Distribution costs	1,75,000
Customer service costs	2,50,000

Required:
(i) Prepare an income statement with a separate supporting schedule of cost of goods manufactured.
(ii) For all manufacturing items, indicate by V or F whether each is basically a variable cost or a fixed cost (where the cost object is a product unit). [CA Inter Nov. 2004, 8 Marks]
Answer:
Schedule for cost of goods manufactured for the month ending Oct., 2020

Income Statement for the month ending Oct., 2020

Question 5.
The following data are available from the books and records of 0 Ltd. for the month of April 2020:
Direct Labour Cost = 1,20,000 (120% of Factory Overheads)
Cost of Sales = 4,00,000
Sales = 5,00,000
Accounts show the following figures:

	1st April, 2020 (₹)	30th April, 2020 (₹)
Inventory:
Raw material	20,000	25,000
Work- in- progress	20,000	30,000
Finished goods	50,000	60,000
Other details:
Selling expenses		22.000
General & Admin, expenses		18,000

You are required to prepare a cost sheet for the month of April 2020 showing:
(i) Prime Cost
(ii) Works Cost
(iii) Cost of Production
(iv) Cost of Goods sold
(v) Cost of Sales and Profit earned [CA Inter January 2021, 10 Marks]
Answer:
Cost Sheet for the Month of April 2020

Working Notes:
1. Computation of the Raw material consumed:

2. Computation of the Raw material purchased:

	₹
Closing stock of Raw Material	25,000
Add: Raw Material consumed	1,60,000
Less: Opening stock of Raw Material	(20,000)
Raw Material purchased	1,65,000

Question 6.
XYZ Auto Ltd. is in the business of selling and finance as part of its overall business strategy is available for the company cars. It also sells insurance The following information

	Physical Units	Sale Value
Sale of Cars	10,000 Cars	₹ 30,000 lakhs
Sale of Insurance	6,000 Policies	₹ 1,500 lakhs
Sale of Finance	8,000 Loans	₹ 19,200 lakhs

The Revenue earnings from each line of business before expenses are as
follows:
Sale of Cars 3% of Sales Value
Sale of Insurance 20% of Sales value
Sale of Finance 2% of Sales value
The expenses of the company are as follows:

Salesman salaries	₹ 200 lakhs
Rent	₹ 100 lakhs
Electricity	₹ 100 lakhs
Advertising	₹ 200 lakhs
Documentation cost per insurance policy	₹ 100
Documentation cost for each loan	₹ 200
Direct sales expenses per car	₹ 5,000

Indirect costs have to be allocated in the ratio of physical units sold. Required:
(i) Make a cost sheet for each product allocating the direct and indirect costs and also showing the product wise profit and total profit.
(ii) Calculate the percentage of profit to revenue earned from each line of business. [CA Inter May 2006, 8 Marks]
Answer:
Product Cost Sheet

Question 7.
Following details are provided by M/s ZIA Private Limited for the quarter ending 30.09.2020:
(i) Direct expenses ₹ 1,80,000
(ii) Direct wages being 175% of factory overheads ₹ 2,57,250
(iii) Cost of goods sold ₹ 18,75,000
(iv) Selling & distribution overheads ₹ 60,000
(v) Sales ₹ 22,10,000
(vi) Administration overheads are 10% of factory overheads
Stock details as per Stock Register:

Particulars	30.06.2020 ₹	30.09.2020 ₹
Raw material	2,45,600	2,08,000
Work in progress	1,70,800	1,90,000
Finished goods	3,10,000	2.75,000

You are required to prepare a cost sheet showing:
(i) Raw material consumed
(ii) Prime cost
(iii) Factory cost
(iv) Cost of goods sold
(v) Cost of sales and profit [CA Inter Nov. 2018, 10 Marks]
Answer:
Cost Sheet for the quarter ending 30.09.2020

(18,75,000 + 2,75,000 – 3,10,000 – (1,47,000 × 10%) + 1,90,000 – 1,70,800 – (2,57,250 × 100/175%) – 1,80,000 – 2,57,250 + 2,08,000 – 2,45,600) = 12,22,650

Working notes:
Purchase of raw materials = Raw material consumed + Closing stock – opening stock of raw material
Raw material consumed = Prime cost – Direct wages – Direct expenses
Factory Overheads = ₹ 2,57,250 × 100/175
Prime cost = Factory cost + Closing WIP – Opening WIP – Factory over-heads
Factory Cost = Cost of Production goods sold + Closing stock of Finished goods – Opening stock of finished goods – Administrative overheads
Net Profit = Sales – Cost of sales

Question 8.
The following data relates to manufacturing of a standard product during the month of March, 2021:

Particulars	(₹)
Stock of Raw material as oil 1-3-2021	80,000
Work-in-Progress as on 1-3-2021	50,000
Purchase of Raw material	2,00,000
Carriage Inwards	20,000
Direct Wages	1,20,000
Cost of special drawing	30,000
Hire charges paid for Plant	24,000
Return of Raw Material	40,000
Carriage on return	6,000
Expenses for participation in Industrial exhibition	8,000
Legal charges	2,500
Salary to office staff	25,000
Maintenance of office building	2,000
Depreciation on Delivery van	6,000
Warehousing charges	1,500
Stock of Raw material as on 31-3-2021	30,000
Stock of work-in-Progress as on 31-3-2021	24,000

• Store overheads on materials are 10% of material consumed.
• Factory overheads are 20% of the Prime cost.
• 10% of the output was rejected and a sum ₹ 5,000 was realized on sale of scrap.
• 10% of the finished product was found to be defective and the defective products were rectified at an additional expenditure which is equivalent to 20% of proportionate direct wages,
• The total output was 8000 units during the month.

You are required to prepare a cost sheet for the above period showing the:
(i) Cost of Raw Material consumed
(ii) Prime Cost
(iii) Work Cost
(iv) Cost of Production
(v) Cost of Sales
Answer:

Working Note: Cost of rectification of defective product
Additional expenditure per unit = Direct Wages per unit × 20%
= \frac{₹ 1,20,000}{8,000 \text { units }} × 20%
= ₹ 15 × 20% = ₹ 3
Cost of rectification = [(Total Output – 10%) × 10%] × ₹ 3
= [(8,000 units – 10%) × 10%] × ₹ 3
= [7,200 units × 10%] × ₹ 3
= 720 units × ₹ 3 = ₹ 2,160

Question 9.
X Ltd. manufactures two types of pens ‘Super Pen’ and ‘Normal Pen’. The cost data for the year ended 30th September, 2020 is as follows:

	₹
Direct Materials	8,00.000
Direct Wages	4,48,000
Production Overhead	1,92,000
Total	14,40,000

It is further ascertained that:
(1) Direct materials cost in Super Pen was twice as much of direct material in Normal Pen.
(2) Direct wages for Normal Pen were 60% of those for Super Pen.
(3) Production overhead per unit was at same rate for both the types
(4) Administration overhead was 200% of direct labour for each.
(5) Selling cost was ₹ 1 per Super pen.
(6) Production and sales during the year were as follow:

Production		Sales
No. of units		No. of units
40,000	Super Pen	36,000
1,20,000

(7) Selling price was ₹ 30 per unit for Super Pen.
Prepare a Cost Sheet for ‘Super Pen’ showing
(i) Cost per unit arid Total Cost
(ii) Profit per unit and Total Profit [CA Inter Nov. 2020, 10 Marks]
Answer:
Preparation of Cost Sheet for Super Pen
No. of units produced = 40,000 units
No. of units sold = 36,000 units

Working Notes:
(i) Direct material cost per unit of Normal pen = M
Direct material cost per unit of Super pen = 2M
Total Direct Material cost = 2M × 40,000 units + M × 1,20,000 units
Or, ₹ 8,00,000 = 80,000 M + 1,20,000 M
Or, M = \(\frac{₹ 8,00,000}{2,00,000}\) = ₹ 4
Therefore, Direct material Cost per unit of Super pen = 2 × ₹ 4 = ₹ 8

(ii) Direct wages per unit for Super pen = W
Direct wages per unit for Normal Pen = 0.6W
So, (W × 40,000) + (0.6W × 1,20,000) = ₹ 4,48,000
W = ₹ 4 per unit

(iii) Production overhead per unit = \(\frac{₹ 1,92,000}{40,000+1,20,000}\) = ₹ 1.20
Production overhead for Super pen = ₹ 1.20 × 40,000 units = ₹ 48,000
* Ad ministration overhead is specific to the product as it is directly related to direct labour as mentioned in the question and hence to be considered in cost of production only.

Assumption: It is assumed that direct materials cost and direct wages given in the question is related to per unit only.

Question 10.
From the following data of Arnav Metallic Ltd., CALCULATE Cost of production: [CA Inter May 2020 RTP]

	₹
(i) Repair & maintenance paid for plant & machinery	9,80,500
(ii) Insurance premium paid for plant & machinery	96,000
(iii) Raw materials purchased	64,00,000
(iv) Opening stock of raw materials	2,88,000
(v) Closing stock of raw materials	4,46,000
(vi) Wages paid	23,20,000
(vii) Value of opening Work-in-process	4,06,000
(viii) Value of closing Work-in-process	6,02,100
(ix) Quality control cost for the products in manufacturing process	86,000
(x) Research & development cost for improvement in production process	92,600
(xi) Administrative cost for: Factory & production Others	9,00,000 11,60,000
(xii) Amount realised by selling scrap generated during the manufacturing process	9,200
(xiii) Packing cost necessary to preserve the goods for further processing	10,200
(xiv) Salary paid to Director (Technical)	8,90,000

Answer:
Calculation of Cost of Production of Arnav Metallic Ltd.

(i) Other administrative overhead does not form part of cost of production.
(ii) Salary paid to Director (Technical) is an administrative cost.

Question 11.
The following details are available from the books of R Ltd. for the year ending 31.03.2021

	₹
Purchase of raw materials	84,00,000
Consumable materials	4,80,000
Direct wages	60,00,000
Carriage inward	1,72,600
Wages to foreman and store keeper	8,40,000
Other indirect wages to factory staffs	1,33,000
Expenditure on research and development on new production technology	9,60,000
Salary to accountants	7,20,000
Employer’s contribution to EPF & ESI	7,20,000
Cost of power & fuel	28,00,000
Production planning office expenses	12,60,000
Salary to delivery staffs	14,30,000
Income tax for the assessment year 202021	2,80,000
Fees to statutory auditor	1,80,000
Fees to cost auditor	80,000
Fees to independent directors	9,40,000
Donation to PM- national relief fund	1,10,000
Value of sales	2,82,60,000
Position of inventories as on 01-04-2020:
– Raw Material	6,20,000
– W-I-P	7,84,000
– Finished goods	14,40,000
Position of inventories as on 31-03-2021:
– Raw Material	4,60,000
– W-I-P	6,64,000
– Finished goods	9,80,000

From the above information PREPARE a cost sheet for the year ended 31.03.2021. [CA Inter Nov. 2020 RTP]
Answer:
Statement of Cost of R Ltd. for the year ended 31,03.2021

Note: Income tax and Donation to PM National Relief Fund is avoided in the cost sheet.

Question 12.
Impact Ltd. provides you the following details of its expenditures for the year ended 31st March, 2021:



Amount realized by selling of waste generates during manufacturing process – ₹ 66,000/-
From the above data, you are required to prepare Statement of cost of Impact
Ltd, for she year ended 31st March. 2021, showing (i) Prime cost, (ii) Factory cost, (iii) Cost of Production, (iv) Cost of goods sold and (v) Cost of sales. [CA Inter RTF Nov. 2021]
Answer:
Statement of Cost of Impact Ltd. for the year ended 31st March, 2021


Note: GST paid under Composition scheme would be included under cost of material as it is not eligible for input tax credit.

Question 13.
DFG Ltd. manufactures leather bags for office and school purpose. The following information is related with the production of leather bags for the month of September 2020.
(i) Leather sheets and cotton cloths are the main inputs, and the estimated requirement per bag is two meters of leather sheets and one meter of cotton cloth. 2,000 meter of leather sheets and 1,000 meter of cotton cloths are purchased at ₹ 3,20.000 and ₹ 15,000 respectively. Freight paid on purchases is ₹ 8,500.
(ii) Stitching and finishing need 2,000 man hours at ₹ 80 per hour.
(iii) Other direct cost of ₹ 10 per labour hour is incurred.
(iv) DFG has 4 machines at a total cost of ₹ 22,00,000. Machine has a life of 10 years with a scrap value of 10% of the original cost. Depreciation is charged on straight line method.
(v) The monthly cost of administrative and sales office staffs are ₹ 45,000 and 172,000 respectively. DFG pays ? 1,20,000 per month as rent for a 2400 sq. feet factory premises. The administrative and sales office occupies 240 sq. feet and 200 sq. feet respectively of factory space.
(vi) Freight paid on delivery of finished bags is ₹ 18,000.
(vii) During the month 35 kg. of leather and cotton cuttings are sold at ₹ 150 per kg.
(viii) There is no opening and closing stocks for input materials. There is 100 bags in stock at the end of the month.
You are required to prepare a cost sheet in respect of above for the month of September 2021 showing:
(i) Cost of Raw iMaterial Consumed
(ii) Prime Cost
(iii) Works/Factory Cost
(iv) Cost of Production
(v) Cost of Goods Sold
(vi) Cost of Sales [CA Inter Dec. 2021, Nov 2019 RTP, 10 Marks]
Answer:
No. of bags manufactured = 1,000 units

Cost sheet for the month of September 2020

Apportionment of Factory rent:
To factory building {(₹ 1,20,000 ÷ 2400 sq. feet) × 1,960 sq. feet] = ₹ 98,000
To administrative office {(₹ 1,20,000 ÷ 2400 sq. feet) × 240 sq. feet] = ₹ 12,000
To sale office {(₹ 1,20,000 ÷ 2400 sq. feet) × 200 sq. feet] = ₹ 10,000

Question 14.
A Ltd. produces a single product X. During the month of December 2021, the company has produced 14,560 tonnes of X. The details for the month of December 2021 are as follows:
(i) Materials consumed ₹ 15,00,000
(ii) Power consumed 13,000 Kwh @ ₹ 7 per Kwh
(iii) Diesels consumed 1.000 litres @ ₹ 93 per litre
(iv) Wages & salary paid – ₹ 64,00,000
(v) Gratuity & leave encashment paid – ₹ 44,20,000
(vi) Hiring charges paid for HEMM- ₹ 13,00,000
(vii) Hiring charges paid for cars used lor official purpose – ₹ 80,000
(viii) Reimbursement of diesel cost for the cars – ₹ 20,000
(ix) The hiring of cars attracts GST under RCM @ 5% without credit.
(x) Maintenance cost paid for weighing bridge fused for weighing of final goods at the time of despatch) – ₹ 7,000
(xi) AMC cost of CCTV installed at weighing bridge (used for weighing of final goods at the time of despatch) and factory premises is 16,090 and ₹ 18,000 per month respectively.
(xii) TA/DA and hotel bill paid for sales manager – ₹ 16,000
(xiii) The company has 180 employees works for 26 days in a month.
Required:
(a) Prepare a Cost sheet for the month of December 2021.
(b) Compute Earnings per manshift (EMS) and Output per manshift (OMS) for the month of December 2021. [CA Inter RTP May 2022]
Answer:
(a) Cost Sheet of A Ltd. for the month of December 2021

(b) Manshift = 180 employees × 26 days = 4,680 manshifts
Computation of earnings per manshift (EMS):