Cost Accounting-I Examples

Cost Accounting Examples Exercise 1: The reported inventory costs and the financial events of ABC Co. met in December 2014 are as follows: DATE Event 1.12.2014 Cost of Beginning Raw Material is 3000 TL Cost of Beginning Work-in Progress is 5.000TL Cost of Beginning Finished Goods is 8.000TL 2.12.2014 Purchased raw material priced at 10.000 TL, and paid 3.000 TL transportation for acquired raw material. 5.12.2014 Issued raw material cost is 7.000 TL. 15.12.2014 Paid 15.000 TL direct labor and 5.000 TL indirect labor in cash. 20.12.2014 Paid 3.000 TL factory electricity in cash. 21.12.2014 Paid 800 TL lubricant cost in cash. 23.12.2014 The depreciation cost is 2.200 TL. 31.12.2014 The cost of Ending Work-in Progress is 4.000 TL The cost of Ending Finished Goods is 5.000 TL The sales of current period is 55.000 TL.

Cost Accounting Examples Exercise 1: Required: Ascertain the cost of finished goods and cost of goods sold. Prepare the statement of cost of goods sold. Present the financial information about cost/expense in financial statements.

Cost Accounting Examples Exercise 2: Find the prime cost, cost of production, cost of sales (total cost) and profit from the following: Direct Materials 95.000 TL Direct Labor 65.000 TL Factory Overheads 154.000TL Administration Expenses 36.500TL Marketing Expenses 100.000TL Distribution Expenses 95.000 TL and The manufactured goods are totally finished and sold at the current period. Sales 600.000 TL.

Cost Accounting Examples Exercise 2-Solution: Prime Cost= Direct Materials+ Direct Labor = 95.000+ 65.000= 160.000TL Cost of Production = Prime Cost+ Factory Overhead Exp. = 160.000+ 154.000= 314.000 TL Total Cost of Business Activities= Cost of Production + General& Administrative Exp.+ Marketing, Selling& Distr. Exp. = 314.000+ 36.500+ 100.000+ 95.000= 545.500 TL Gross Profit= Sales- Cost of Goods Sold = 600.000- 314.000= 286.000 TL Operating Profit/Loss= Sales – (Cost of Goods Sold + Gen. Ad. Exp.+ Marketing, Selling& Distr. Exp. =600.000 – (314.000+36.500+195.000) = 54.500 TL

Cost Accounting Exercise 3:Calculate Prime Cost, Factory Cost, Cost of Production, Cost of Sales (Total Cost) and profit from the following particulars: COST COMPONENTS TL Oil Consumption 250 Direct Wages 86.650 Salaries of Salesmen 15.100 Management Salaries 10.000 Net Purchase of Raw Materials 120.540 Depreciation of Delivery Trucks 1.600 Insurance Expense of Finished Goods 2.500 Beginning Inventory of Raw Materials 3.260 Factory Rent 8.300 Lightening of Showroom 1.500 Depreciation of Factory Building 3.800 Ending Inventory of Raw Materials 1.100 Office Salaries and Expenses 7.000 Commission to Salesmen 2.850 Transportation to Customer 2.800 Wages of Maintenance Workers 12.600 Electricity of Office Building Sales 350.000

Exercise 3- Solution: Direct Material Cost 122.700   122.700 Cost of Beginning Raw Materials 3.260 Net Purchases 120.540 Cost of Ending Raw Materials (1.100) Direct Labor Cost 86.650 PRIME COST 209.350 Factory Overhead Cost 24.950 Wages of Maintenance Workers 12.600 Factory Rent 8.300 Depreciation of Factory Building 3.800 Grease Oil Consumption 250 COST OF PRODUCTION 234.300 General and Administrative Expenses 20.800 Management Salaries 10.000 Electricity of Office Building Office Salaries and Expenses 7.000 Marketing, Selling And Distribution Expenses 26.350 Salaries of Salesmen 15.100 Transportation to Customer 2.800 Depreciation of Delivery Trucks 1.600 Insurance Expense of Finished Goods 2.500 Commission to Salesmen 2.850 Lightening of Showroom 1.500 TOTAL COST 281.450

Cost Accounting Examples Exercise 3: Find the cost of raw material, work-in progress, finished goods, cost of production and cost of sales (total cost) and profit from the following: The cost of beginning raw material is 105 TL. Company purchased 1.000 kg. of raw material priced at 165 TL and the acquisition cost of it is 25 TL. The cost of ending raw material is 95TL. Direct labor cost is 110 TL, indirect labor cost is 35 TL. The cost of indirect material is 30 TL. The depreciation cost of factory building and machinery is 30 TL. The rent of store is 100 TL and the packing material used in store is 20 TL. The office salaries are 90 TL and the office supply consumed in administrative department is 25 TL. The cost of beginning work-in progress is 120 TL, ending is 95 TL. The cost of beginning finished goods is 150 TL, ending 80 TL. The amount of total sales is 1.200 TL.

Cost Accounting Recording System-Example The economic events that ABC Furniture met in May are as follow: The material priced 200.000 TL has been purchased on account. The raw material cost 50.000 TL and other material cost 30.000 TL has been issued and has been issued. Direct labor cost 30.000 TL, indirect labor cost 10.000 TL has been accrued. The factory amortization cost is 6.000 TL, machinery amortization cost is 4.000 TL, sales outlet amortization cost is 3.000 TL. The wages and salaries for selling department cost 4.000 TL has been accrued. The office supplies used in selling department cost 1.000 TL.

Cost Accounting Recording System-Example Beginning Work-in Progress cost is 30.000 TL, Ending Work-in Progress cost is 30.000 TL. Beginning Finished Goods cost is 10.000 TL (1.000 kg x 10 TL). 2.000 kg. goods has been started to manufactured and finished in May. 1.000 kg finished goods with %30 profit margin on cost has been sold on account. Requested: Ascertain total and unit cost. Prepare the statement of cost of goods sold. Present the cost/expense in financial statements (Balance Sheet/Income Statement)