Home / NOTES

1949 Views

Estimated reading time : 149 Minutes

Output Costing | Exam Based Questions and Answers | Cost Accounting

Arjun EP

Published on: April 18, 2021

Exam Based Problems and Answers of Output Costing

Exam based problems and answers of Output Costing are the BEST collection for sure shot success in the examination.

These questions are based on board exam.

These questions are set in easy to difficult series.

These questions are set according to:

Based on amount

Based on percentage

Based on units

Tender sheet

#####

EXAM BASED PROBLEMS AND ANSWERS OF COST SHEET

COST SHEET BASED ON AMOUNT

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 1

ABC Manufacturing Company gives the details regarding a product ($/₹/Rs):

Stock of finished goods at beginning	30,000	Factory employees’ salary	40,000
Stock of raw materials at the beginning	10,000	Factory rent and taxes	15,000
Work-in-progress at beginning	20,000	Power expenses	5,000
Purchases of raw materials	250,000	General expenses	20,000
Carriage inward	5,000	Stock of finished goods at the end	10,000
Dividend paid	10,000	Stock of raw materials at the end	35,000
Direct wages	80,000	Work-in-progress at the end	10,000
Work manger’s salary	20,000	Profit on sale	20%

Required: Cost sheet showing:

(a) Cost of material consumed, (b) Prime cost, (c) Factory cost; (d) Cost of production, (e) cost of goods sold,

(f) Selling price

[Answer: (a) Rs 230,000; (b) Rs 310,000; (c) Rs 400,000; (d) Rs 420,000;

(e) Rs 440,000; (f) Rs 550,000;*No entry for dividend paid

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 2

Following particulars are extracted from the records of AD Manufacturing Company ($/₹/Rs):

Particulars	Opening	Closing
Stock of materials	40,000	24,000
Stock of work-in-progress	18,000	15,000
Stock of finished goods	14,000	16,000

Other information:

Direct wages	96,000	Administrative expenses	36,000
Raw materials purchased	1,60,000	Factory expenses	44,500
Carriage of purchase	2,400	Selling and distribution expenses	20,500
Direct expenses	2,000	Carriage on sales	1,200
Tax paid	1,000

Required: A statement of cost showing:

(a) Cost of materials used, (b) Prime cost, (c) cost of production, (d) Total cost, (e) Profit 25% on cost

[Answer: (a) Rs 1,78,400; (b) Rs 2,76,400; (c) Rs 3,57,900; (d) Rs 3,79,600;

(e) Rs 94,900; *Factory cost = Rs 323,900; COGS = Rs 357,900;

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 3

Cost information of a manufacturing company is given below ($/₹/Rs):

Stock	Opening	Closing
Raw materials	1,75,000	1,91,500
Work-in-progress	1,28,000	1,35,500
Finished goods	1,54,000	1,31,000

Other information:

Sales	10,00,000	Expenses on purchase	11,500
Raw materials purchased	3,66,000	Carriage outward	22,500
Direct wages	1,52,500	Advertisement	13,500
Indirect wages	12,750	Office rent and taxes	12,500
Gain on sales of fixed assets	20,000	Selling and distribution expenses	16,500
Factory rent	1,15,000	Depreciation of machinery	13,500

Required: Prepare cost sheet showing:

Prime cost, factory cost, cost of production, cost of goods sold, total cost and net profit

Percentage of profit on sales and percentage of total cost on sales

[Answer: PC = Rs 5,13,500; WC = Rs 6,47,250; COP = Rs 6,59,750;

COGS = Rs 6,82,750; TC = Rs 7,35,250; Profit = Rs 2,64,750

POS = 26.48%; TCOS = 73.53%)

COST SHEET BASED ON PERCENTAGE

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 4

ABC Manufacturing Company has the following information for you ($/₹/Rs):

Stock	Opening	Closing
Finished goods	Rs 30,000	Rs 35,000
Work-in-progress	Rs 20,000	Rs 15,000
Raw materials	Rs 20,000	Rs 30,000

The other information provided by the company for the month was as follows:

Purchase of raw materials Rs 200,000

Direct labour cost Rs 110,000

Sales for the month Rs 600,000

Factory expenses 50% of direct labour cost

Selling expenses 10% of sales

Administrative overhead 10% of factory cost

Required: Cost sheet showing:

Cost of raw material consumed, prime cost, work cost, cost of production, Cost of goods sold, Total cost and net profit

[Answer: MC = Rs 190,000; PC = Rs 300,000; WC = Rs 360,000; COP = Rs 396,000;

COGS = Rs 391,000; COS = Rs 451,000; Profit = Rs 149,000

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 5

A manufacturing company submitted the following information on 31st December, last year:

Sales for the year Rs 2,00,000

Purchase of raw materials Rs 40,000

Direct labour cost Rs 50,000

Factory overhead was 50% of direct labour cost. Other expenses for the year were:

Selling expense 15% of sales

Administrative expenses 10% of sales

The opening and closing balances were ($/₹/Rs):

Stock	1st January	31st December
Raw materials	Rs 10,000	Nil
Work-in-progress	Rs 20,000	Rs 15,000
Finished goods	Rs 18,000	Rs 12,000

Required: Cost sheet showing: (i) Prime cost, (ii) Work cost, (iii) Cost of production, (iv) Cost of goods sold,

(v) Total cost, (vi) Net profit

[Answer: (i) Rs 1,00,000; (ii) Rs 1,30,000 ; (iii) Rs 1,50,000;

(iv) Rs 1,56,000 ; (v) Rs 1,86,000; (vi) Rs 14,000;

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 6

The details regarding the product are:

The opening and closing balances of inventory for a month are as under ($/₹/Rs):

Stock	Opening	Closing
Finished goods	45,000	55,000
Raw materials	30,000	40,000

The information provided by the company for the month ended was as under:

Purchase of raw materials	Rs 3,00,000
Direct wages	Rs 1,50,000
Factory expenses	40% of direct wages
Office expenses	20% of factory cost
Profit	25% of sales value

Required: Cost sheet showing: (a) Cost of material consumed; (b) Prime cost; (c) Factory cost,

(d) Cost of production; (e) Total cost; (f) Sales value

[Answer: (a) Rs 290,000; (b) Rs 440,000; (c) Rs 500,000;

(d) Rs 600,000; (e) Rs 590,000; (f) Rs 786,667;

COST SHEET BASED ON UNITS

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 7

LK Manufacturing Company has the following extracted information ($/₹/Rs):

Beginning inventory of raw materials	20,000	Office expenses	10% of factory cost
Purchases	48,000	Selling and distribution cost	Rs 20 per unit
Carriage on material purchased	2,000	Units produced	2,640 units
Ending inventory of raw material	10,000	Units sold	3,000 units
Factory expenses	60,000	Ending inventory of finished goods	640 units
Direct labour costs	180,000	Profit percentage	20% of cost price

Required: cost sheet showing: (a) cost of material consumed, (b) prime cost, (c) factory cost,

(d) Cost of opening finished goods, (e) cost of production, (f) Total cost, (g) profit.

[Answer: (a) Rs 60,000; (b) Rs 2,40,000; (c) Rs 300,000; (d) 1,000 units, Rs 125,000;

(e) Rs 330,000; (f) Rs 435,000; (g) Rs 87,000; *Opening stock = 1,000 units;

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 8

Mr Gopal furnished the following data relating to ABC Manufacturing Company of the standard product ($/₹/Rs):

Raw materials consumed	Rs,15,000
Direct labour charge	Rs 9,000
Machine worked hours	900 hours
Machine rate per hour	Rs 5
Administrative expenses	20% on work cost
Selling expenses	Re 0.50 per unit
Units produced	17,100 units
Units sold	16,000 units @ Rs 4 per unit

Required: You are required to prepare a cost sheet from the above-mentioned information showing:

Prime cost, factory cost, cost of goods sold and profit.

[Answer: PC = Rs 24,000; FC = Rs 28,500; COGS = Rs 32,000;

Profit = Rs 24,000; *Closing stock 1,100 units; Rs 2,200;

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 9

Cost abstracts of AR Manufacturing Company for the current month ($/₹/Rs):

Materials purchase	2,80,000	Salaries and benefits	10,000
Ending inventory of material	30,000	Depreciation and machinery	5,000
Direct wages	1,30,000	Depreciation of office building	5,000
Indirect supplies and wage	10,000	Selling and distribution cost	20,000
Rent, rates and taxes- factory	5,000	Units produced	4,000 units
Bank charge	5,000	Units sold at a profit of 20% on sale	5,000 units

Beginning inventory of raw materials Rs 20,000

Beginning inventory of finished goods (for 2,000 units) Rs 120,000

Required: Cost sheet showing: (a) prime cost, (b) factory cost, (c) cost of production, (d) Total cost,

(e) Selling price per unit, (f) profit earned

[Answer: (a) Rs 4,00,000; (b) Rs 4,20,000; (c) Rs 4,40,000;

(d) Rs 4,70,000; (e) Rs 117.50 per unit; (f) Rs 1,17,500;

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 10

The following extracted information was given for the production of 24,596 units of Plastic Buckets ($/₹/Rs):

Stock	Opening	Closing
Raw materials	Rs 22,000	Rs 18,400
Semi-finished goods	Rs 15,300	Rs 17,600
Finished products	1,200 units	2,400 units
Value of finished stock	?	?

Other information:

Raw material purchased Rs 99,000

Direct labour cost Rs 82,500

Rent, rates, and factory expenses Rs 33,000

Carriage on purchase Rs 1,200

Factory supervision cost Rs 6,600

Administrative expenses are charged at 10% of work cost

Selling and distribution expenses Re 1 per units sold

Factory expected to earn 20% on selling price

Required: A statement of cost and profit showing: (a) Cost of raw material used, (b) factory cost, (c) cost of production, (d) Cost of goods sold, (e) Total cost, (f) sales revenue.

[Answer: (a) Rs 1,03,800; (b) Rs 2,23,600; (c) Rs 2,45,960;

(d) Rs 233,960; (e) Rs 257,356; (f) Rs 321,695;

*COP per unit = Rs 245,960 / 24,596 units = Rs 10

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 11

The beginning and ending balances of a manufacturing company for a month are as under ($/₹/Rs):

Stock	Opening	Closing
Raw materials	Rs 12,000	Rs 10,000
Work-in-progress	Rs 6,000	Rs 8,000
Finished goods	Rs 10,000	?
Finished goods in units	500 units	?

The information available from cost records for the month ended was as follows:

Direct materials purchased Rs 120,000	Indirect materials Rs 34,000
Selling and distribution expenses Rs 10,000	Other factory expense Rs 30,000
Freight on material purchased Rs 6,000	Production units 16,000 units
Indirect labour Rs 18,000	Sales units 15,000 units
Direct labour Rs 32,000	Profit 10% on the cost

Required: A statement of cost and profit showing: (a) Cost of raw material consumed, (b) Prime cost,

[Answer: (a) Rs 1,28,000; (b) Rs 1,60,000; (c) Rs 2,40,000; (d) Rs 2,40,000;

(e) Rs 2,27,500; (f) Rs 2,37,500; (g) Rs 2,61,250;

* COP per unit (Rs 240,000 ÷ 16,000) = Rs 15; Closing stock = 1,500 units;

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 12

The cost details of ABC Manufacturing Company are ($/₹/Rs):

Opening stock of raw materials	1,20,000	Administrative expenses	10% of direct wages
Purchased	3,00,000	Selling and distribution cost	4 per unit
Carriage on purchases	6,000	Opening stock of finished goods	3,000 units
Closing stock of raw materials	60,000	Closing stock of finished goods	2,000 units
Direct wages	6,00,000	Unit produced	9,000 units
Factory expenses	95,000	Profit	10% of sales
Sale of scrap	5,000

Required: Cost sheet showing: (1) Cost of materials consumed, (2) Prime cost, (3) Factory cost,

(4) Cost of production, (5) Cost of goods sold, (6) Total cost, (7) Profit, (8) Sales

[Answer: (1)Rs 3,66,000; (2) Rs 9,66,000; (3) Rs 10,56,000; (4) Rs 11,16,000;

(5) Rs 12,40,000; (6) Rs 12,80,000; (7) Rs 1,42,222; (8) Rs 14,22,222;

*Scrap sold is income for factory;

TENDER SHEET OR QUOTATION

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 13

A work order has been received from a customer for which, the following expenses were estimated ($/₹/Rs):

Materials Rs 2,00,000	Office on cost 25% of work cost
Wages Rs 50,000	Selling and distribution expenses 20% of factory expenses
Works expense 80% of wages

The tender price should give a return of 25% on quoted price.

Required: Tender sheet showing:

(a) Prime cost, (b) factory cost, (c) cost of production, (d) Total cost, (e) price to be quoted

[Answer: (a) Rs 250,000; (b) Rs 290,000; (c) Rs 362,500;

(d) Rs 3,70,500; (e) Rs 494,000;

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 14

The details regarding a product are given below ($/₹/Rs):

Particulars	Amount
Direct materials cost	2,00,000
Direct labour cost	1,00,000
Prime cost	3,00,000
Add: Factory expenses	60,000
Work cost	3,60,000
Add: Office expenses	36,000
Cost of production	3,96,000

For submitting a quotation of 200 units, it has been estimated that:

Material Rs 200 per unit and labour Rs 100 per unit respectively.

A profit of 25% on quotation price is expected.

Required: A quotation sheet showing:

(a) Prime cost, (b) work cost, (c) cost of production, (d) profit, (e) quoted price

[Answer: (a) Rs 60,000; (b) Rs 72,000; (c) Rs 79,200; (d) Rs 26,400;

(e) Rs 105,600; *FO = 60%; OO = 10%; S&DO = Nil; PP = 25% given

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 15

The following figures have been extracted from the cost record of MM Company ($/₹/Rs):

Cost of materials	Rs 240,000
Wage for labour	Rs 200,000
Factory overhead (based on prime cost)	Rs 132,000
Distribution expenses	Rs 56,400
Administrative expenses	Rs 134,000
Selling expenses	Rs 89,600
Profit	Rs 153,000

A work order is to be executed in 2020 and the following expenses will incur:

Cost of material Rs 32,000

Wage for labour Rs 20,000

Carriage on purchase Rs 3,000

Assuming that the rate of factory expenses increase in 2020 by 20%.

Distribution, administrative and selling expenses are based on the factory cost

Required: Cost statement and Quotation price of the job showing:

(a) Prime cost, (b) factory cost, (c) cost of production, (d) Total cost,

(e) Profit so as to earn the same percentage of profit on selling price.

[Answer: Cost sheet: PC = Rs 440,000; WC = Rs 572,000;

COP = Rs 706,000; COS = Rs 852,000; Profit = Rs 153,000;

Tender sheet: PC = Rs 55,000; WC = Rs 74,800;

COP = Rs 92,326; COS = Rs 111,415; Profit = Rs 20,002;

*FO = 36% (30%+6%); AO = 23.43%; S&DO = 25.52%; PP = 15.22%

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 16

AL Toy Manufacturing Company showed the following details of its production department ($/₹/Rs):

Direct materials	Rs 200,000		Works expenses	Rs 25,000
Direct labour	Rs 50,000		Office expenses	Rs 55,000

The company wants to quote the unit price for its product for the next batch. The costing department estimated the direct cost as follows: direct materials Rs 5,000, direct labour Rs 4,000.

Expenses are to be allocated as below:

Works expenses: on the basis of prime cost

Office expenses: on the basis of factory cost

The company wants to yield a profit of 25% on the cost price.

Required: Cost sheet and tender sheet

[Answer: Cost sheet: PC = Rs 250,000; WC = Rs 275,000; COP = Rs 330,000; COS = Rs 330,000;

Tender sheet: PC = Rs 9,000; WC = Rs 9,900; COP = Rs 11,880; COS = Rs 11,880; Profit = Rs 2,970;

*WE = 10%; OE = 20%; S&DO = Nil; Profit = 25% given

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 17

AK Food Industry showed the following details of its production for 1,000 units ($/₹/Rs):

Direct materials	Rs 25,000	Administrative expenses	Rs 4,000
Direct labour	Rs 10,000	Selling expenses per unit	Rs 10
Factory overhead	Rs 5,000

The industry wants to estimate the total cost and its selling price for the next lot of 500 units.

The costing department estimated as follows:

(a) Materials unit cost will be increased by Rs 10 per unit.

(b) Labour cost will be decreased by Rs 5

(d) Administrative expenses increased by 5%

(e) Selling expenses remain the same per unit.

The industry wants to yield a profit of 20% on the tender price.

Required: Selling price to be quoted for new lot

Tender sheet: PC = Rs 20,000; WC = Rs 25,000; COP = Rs 27,625;

COS = Rs 32,625; Profit = Rs 8,156; * New OE on FC = 10.5%

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 18

The following particulars are extracted from the cost records of the last month ($/₹/Rs):

Direct materials used	20,000 kg @ Rs 10 per kg.
Direct labour cost	100% of the cost of materials
Factory expenses	50% of direct Labour
Administrative overhead	10% of factory cost

The following estimations were made for submitting a tender:

The estimated cost of materials is Rs 30,000 and direct Labour Rs 30,000

Factory and administrative expenses will maintain the same relationship as in the last month.

A profit of 20% on selling price is to be maintained.

Required: A statement of cost and tender price showing:

(a) Prime cost, (b) factory cost, (c) cost of production, (d) profit, (e) selling or tender price

[Answer: Cost sheet: (a) Rs 400,000; (b) Rs 500,000; (c) Rs 550,000; (d) Rs 137,500; (e) Rs 687,500;

Tender sheet: (a) Rs 60,000; (b) Rs 75,000; (c) Rs 82,500; (d) Rs 20,625; (e) Rs 103,125;

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 19

ABC Manufacturing Company showed the following details of its production cost for 2,000 units ($/₹/Rs):

Direct materials	Rs 40,000	Office overhead	Rs 8,000
Direct wage	Rs 20,000	Selling expenses	Rs 2,000
Factory overhead	Rs 16,000	Profit	20% on sales

The company wants to estimate the total cost and selling price for 3,000 units. It is estimated that:

Materials cost will be increased by 25%

Wage cost will be increased by 20%

Overheads are to be allocated as below:

Factory overhead on the basis of direct wage

Office and selling overhead on the basis of factory cost.

Required: A statement of cost and tender price showing (amount nearest rupees):

(a) Prime cost, (b) work cost, (c) cost of production, (d) total cost; (e) profit; (f) Selling or tender price

[Answer: Cost sheet: (a) Rs 60,000; (b) Rs 76,000; (c) Rs 84,000;

(d) Rs 86,000; (e) Rs 21,500; (f) Rs 107,500;

Tender sheet: (a) Rs 111,000; (b) Rs 139,800; (c) Rs 154,515;

(d) Rs 158,195; (e) Rs 39,549; (f) Rs 197,744;

*MCPU = Rs 25; WCPU = Rs 12; FO = 80%; OO = 10.526%; SE = 2.632%

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country

Problem: 20

AM Manufacturing Company has the following cost sheet (amount in $/₹/Rs):

Cost Sheet

Cost Sheet for 6,000 units

Particulars		Amount	Amount
Opening stocks of materials			20,000
Add:	Purchase		1,50,000
Add:	Carriage on purchase		5,000
	Total cost of materials available		1,75,000
Less:	Closing stock of materials		25,000
	Value of material consumed		1,50,000
Add:	Direct wages		1,50,000
	Prime cost		3,00,000
Add:	Factory on-cost:
	Indirect wages	10,000
	Indirect materials	20,000
	Depreciation of machinery	15,000
	Water, electricity and fuel	15,000	60,000
	Factory cost		3,60,000
Add:	Office on-cost:
	Salary of office staffs	18,000
	Rent of office building	18,000	36,000
	Cost of production (6,000 units)		3,96,000
Add:	S&D cost (being Rs 10 per unit)		60,000
	Total cost		4,56,000
Add:	Profit		1,14,000
	Selling price		5,70,000