Acost sheetprovides per unitcostof a product or service which the organization incurs at every stage of business operation, which helps themanagementto analyze and control such overheads. It also helps in deciding the selling price of a product or service based on thecostincurred and profit expected out of it.

Q_1: Cost Sheet for the year ended 31 December 2019 from the following figurers extracted from the books of Engineering Co.

Opening Inventory:

(i)Raw Materials-Rs40,350, (ii) Work-in-process-15, 000 (iii)Finished goods-35, 590

Cost incurred during the period:

Materials purchased-250, 000, Wages paid-200, 000, Carriage inward-2, 000, Consumable stores-10,000, Wages of store keeper-7, 000, Depreciation of plant & machinery-10,000, Materials destroyed by fire-5, 000, Repairs & enewals-5, 010, Office manager salary- 10,000, Salary to office staff-20,500, Printing & Stationary-10,000, Power-10,500, Lightning for office building-2, 000, Carriage inward-3, 000, Freight-5, 000, Entertainment-2,500, Warehousing charges-1, 500, Legal charges-2, 000, Expenses for participating in industrial ehgibbition-6, 000.

Closing inventory:

(i)Raw materials-35, 000, (ii) Work-in-process-14, 500 (iii) Finished goods-40, 030, Profit 25% on cost.

Q_2:The following data are available for 2019:

Production 50, 000 units

Materials consumed Rs-75, 000,

Direct wages-50, 000

Variable production overhead-100,000

Variable selling overhead-200, 000

Fixed expenses-75, 000

Selling price per unit-Rs12

It is expected that in 2020:

(a)Production will be 100, 000 units

(b)Prices of materials will go up by 33.33%

(c)Variable selling overhead and fixed expenses will rise by 25% and Rs25, 000

respectively.

What would be the cost per unit and selling price in 2020, if it is desired to maintain the same rate of profit on sales as in 2019?