The following is the summarised Trading and Profit and Loss A/c of K. Waterproof Manufactures, Ltd., for the year ending 31st march, 2007 in which year 800 waterproofs were sold by the said company.

Following estimates were made by the costing department of the company for the year ending 31st March, 2008: 

(a). The output and the sales will be 1,000 waterproofs. 

(b). The price of materials will rise by 25% on the previous years level.

(c). Wages during the year will rise 12 1/2 %.

(d). Manufacturing cost will rise in proportion to the combined cost of materials and wages. 

(e). Selling cost per unit will remain unchanged. 

(f). Other expenses will remain unaffected by the rise in output. 

From the above information prepare a cost statement showing the price at which the waterproofs would be marketed so as to show a profit of 10% on the selling price.

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To cost of materials To Direct wages To Manufacturing charges To Gross profit c/d To Office salaries To Rent and taxes To Selling expenses To General expenses To Net profit Trading and Profit and Loss A/c Rs. 32,000 48,000 20,000 60,000 1,60,000 24,000 4,000 8,000 12,000 12,000 60,000 By Sales By Gross profit b/d Rs. 1,60,000 1,60,000 60,000 60,000