(1) It is prepared as a statement It is prepared as an account. (2) Expenses are classified to ascertain prime Expenses are not classified cost, factory cost, total cost, etc. (3) To enable comparison, figures of previous No figures of previous period are provided. Hence no period are provided comparison is possible. (41) it is based on actual and estimated figures It is based on actual figures. of expenses. (5) It is prepared for each job and sometimes it is prepared for each production department for the whole factory REVIEW QUESTIONS Re-write the following sentence after filling in the blank spaces with appropriate word: @ An account giving details of cost of production, cost of sales and profit made during a particular period is called (19 Unit cost method is used in _{name two industry. Correct answer:) Production account (n) Brick, Coal Illustration 1 The following particulars have been extracted from the books of a manufacturing company for the month of March, 2014: , ; 2 Stock of materials as on 1st March, 2013 47,000 Stock of materials as on 31st March, 2013 50,000 Materials purchased during the month 2,08,000 Drawing office salaries 9,600 Counting house salaries 14,000 112 Carriage on purchases 8,200 Carriage on sales 5,100 Cash discount allowed 3,400 Bad debts written oft 4,700 Repairs of plant, machinery and tools 10,600 Rent, rates, taxes and insurance (factory) 3,000 Rent, rates, taxes and insurance (office) 1,000 Travelling expenses 3,100 Travellers salaries and commission 8,400 Productive wages 1,40.000 Depreciation written off on plant, machinery and tools 7.100 Depreciation written off on office furniture 600 Directors' fees 6,000 Gas and water charges (factory) 1,500 Gas and wafer charges (office) 300 General charges 5,000 Manager's salary 12,000 Out of 48 working hours in a week, the time devoted by the Manager to the factory and office was on an average 40 hours and 8 hours respectively throughout the month 1,00.000 units were produced and sold; there was no opening or closing stock of it Prepare a cost sheet showing the following: (1) Cost of Materials Consumed: (ii) Prime Cost: (iii) Works Overhead: (iv) Works Cost: (v) Office and Administration Overhead: (vi) Cost of Production (vii) Selling and Distribution Overhead, and (viil) Total Cost or Cost Sales