A proforma cost sheet of a company provides the following particulars Elements of cost Material - 40% Direct labour - 20% Overheads - 20% The following further particulars are available a) It is proposed to maintain a level of activity of 2, 00,000 units b) Selling price is Rs 12 per unit c) Raw materials are expected to remain in stores for an average period of one month d) Material will be in process, on average half a months and is assumed to be consisting of 100% raw material, wages and overheads e) Finished goods are required to be in stock for an average period of one month f) Credit allowed to debtors is two months g) Credit allowed by suppliers is one month You may follow that sales and production follow a consistent pattern, You are required to prepare a statement of working capital requirements a forecast profit and loss account and balance sheet of company assuming that Share capital -Rs 15, 00,000 8% debentures -Rs 2, 00,000 Fixed Assets -Rs 13, 00, 000
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
. A proforma cost sheet of a company provides the following particulars
Elements of cost
Material - 40%
Direct labour - 20%
Overheads - 20%
The following further particulars are available
a) It is proposed to maintain a level of activity of 2, 00,000 units
b) Selling price is Rs 12 per unit
c) Raw materials are expected to remain in stores for an average period of
one month
d) Material will be in process, on average half a months and is assumed to
be consisting of 100% raw material, wages and overheads
e) Finished goods are required to be in stock for an average period of one
month
f) Credit allowed to debtors is two months
g) Credit allowed by suppliers is one month
You may follow that sales and production follow a consistent pattern,
You are required to prepare a statement of working capital requirements a
Share capital -Rs 15, 00,000
8% debentures -Rs 2, 00,000
Fixed Assets -Rs 13, 00, 000
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