Honesty Engineering Works has a machining shop in which it manufactures two auto parts, P1 and P2 out of forging F1 and F2. For the quarter ending December 2003, following cost data are available:

You are given following further information: 

(a). Production and sale of P1 and P2 were as under:

(b). Direct wages paid were Rs. 36,000 in case of P1 and Rs. 32,000 for P2. This basis is used for apportioning wages and salaries and factory overheads. Following machine-hours were utilised in production of these products:

(c). Stores and spare, repairs and maintenance, power, insurance and depreciation are charged to cost of both the products on the basis of machine hours used. Administrative overheads are apportioned on the basis of respective conversion costs while distribution overheads on the basis of their sales realisation.

(d). All the production was sold out:

Required: 

Prepare cost sheets of both the products and work out profit earned on each of them.

Transcribed Image Text:

Consumption of raw materials: F1 : F2 Wages and salaries Stores and spares Repairs and maintenance Power Insurance Depreciation Factory overheads Administration overhead Distribution overheads Total cost Rs. 1,50,000 2,00,000 1,53,000 12,000 15,000 16,000 8,000 50,000 68,000 64,400 75,000 8,11,400