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98
Unit 9

CGS # 9.1: Test your understanding
1. Ascertain Cost of Goods Sold from the following figures:
Opening Inventory / Stock Rs. 3,700
Purchases 20,800
Closing Inventory / Stock 2,500
CGS = OI + P - CI
2. Ascertain Cost of Goods Sold from the following figures:
Opening Stock Rs. 8,500
Purchases 30,700
Direct Expenses 4,800
Indirect Expenses 5,200
Closing Inventory 9,000
CGS = OS + P + DE - CI
3. Ascertain Purchases from the following figures:
Cost of Goods Sold Rs. 80,700
Opening Stock 5,800
Closing Stock 6,000
Purchases = CGS OS + CS
4. Calculate Gross Profit from the following figures:
Cost of Goods Sold Rs. 70,800
Sales 130,200
GP = Sales - CGS
5. Ascertain Gross Profit from the following figures:
Opening Inventory Rs. 5,570
Purchases 13,816
Sales 15,284
Purchase Return 390
Return Inward 524
Closing Stock 8,880
GP = Net Sales + CS OI Net Purchases
6. From the following information extract Gross Profit and Net Profit:
Beginning Inventory Rs. 2,400 Carriage in Rs. 524
Purchases 15,205 Wages 2,800
Sales 20,860 Wages Outstanding 96
Return Outward 185 Loss by fire 1,000
Return Inward 860 Indirect Expenses 200
Closing Inventory 3,840
GP = Net Sales + CI BI Net Purchase - Direct Expenses
NP = GP Indirect (other than Direct Expenses)







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99
Unit 9

CGS # 9.2: Test your understanding
1. Ascertain Cost of Goods Sold from the following figures:
Opening Stock Rs. 15,000
Purchases 5,000
Closing Stock 7,000
Cost of Goods Sold
2. Ascertain Gross Profit / Loss form the following figures:
Opening Inventory Rs. 12,000
Net Purchases 7,500
Sales 14,000
Closing Stock 1,500
Return Inward 2,500
Gross Loss
3. Ascertain Purchases from the following figures:
Cost of Sales Rs. 90,000
Beginning Inventory 15,000
Ending Inventory 7,000
Purchases
4. From the following information extract Gross Profit and Net Profit:
Opening Inventory Rs. 3,000
Purchases 14,000
Sales 22,000
Closing Inventory 5,500
Sales Return 1,500
Wages and Salaries 500
Financial Charges 1,500
Carriage Inward 150
Salaries Outstanding 400
Carriage Outward 100
Gross Profit
Net Profit


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100
Unit 9
CGS # 9.3: Test your understanding
1. Ascertain Cost of Goods Sold from the following figures:
Opening Stock Rs. 17,000
Purchases 4,000
Closing Stock 2,500
Cost of Goods Sold
2. Ascertain Gross Profit / Loss form the following figures:
Opening Inventory Rs. 8,000
Net Purchases 9,500
Sales 27,000
Closing Stock 5,000
Return Inward 4,500
Gross Profit
3. Ascertain Purchases from the following figures:
Cost of Sales Rs. 110,000
Beginning Inventory 45,000
Ending Inventory 26,000
Purchases

4. From the following information extract Gross Profit and Net Profit:
Opening Inventory Rs. 5,500
Purchases 7,000
Sales 33,000
Closing Inventory 7,500
Sales Return 2,000
Wages and Salaries 1,500
Financial Charges 2,500
Carriage Inward 150
Wages Outstanding 400
Carriage Outward 100
Gross Profit
Net Profit

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101
Unit 9

CGS # 9.4: The following are the figures relating to the YYY Commodity Production for the month of March, 2010.

Description Amount Description Amount
Stock on 1.03.2010_ Raw Material Rs. 75,000 Stock on 31.03.2010_ Raw Material Rs. 50,000
Factory overheads 8,000 Sales 270,000
Purchases of Raw Material 100,000 Wages on Purchases 5,000
Stock on 1.03.2010_ Finished Goods 48,000 Stock on 31.03.2010_ Finished Goods 25,000
Direct Labor 12,000 Office & Admin Overhead 3,000
Return inward 10,000 Marketing Expenses 15,000
Work in process on 1.03.2010 5,000 Work in process on 31.03.2010 3,000

Requirement: Prepare statement showing Prime Cost; Conversion Cost; Total Cost; Cost of Goods Manufactured; Cost of
Goods Sold. Calculate Gross Profit; Net Profit and per unit cost by assuming that 38,000 units were produced during March.

Y Y Y C ommodity P roduction
Cost of Goods Sold Statement
For the month ended March, 2010




















Gross Profit =
Net Profit =
Per Unit Cost =
Conversion Cost =
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102
Unit 9

CGS # 9.5: These data relate to Zakar Co.'s July 2009 operations:
Materials, Beginning .. Rs. 7,000 Materials, Ending .. Rs. 9,000
WIP, Beginning . 7,500 WIP, Ending . 3,500
Finished goods, Beginning 10,000 Finished goods, Ending 12,000
Materials used 46,800 Direct Expenses . 400
Selling and general expenses . 6,700 Direct Labour 8,000

Factory overhead is applied at the rate of 80% of direct labor cost.
Requirement:
Cost of materials purchased, Cost of goods manufactured, Cost of goods sold and Conversion Cost.

Zakar Company
Cost of Goods Sold Statement
For the Ended July, 2009

Cost of Goods Sold Rs. 63,200


Conversion Cost =
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103
Unit 9

CGS # 9.6: Following are data Extracted fromStar Pvt. Ltd. at the end of December 31
st
, 2008.
Sales Rs. 14,000,500 Sales Return .. Rs. 25,200
Purchases (Net) 2,400,000 Transportation inward ... 32,000
Direct Labour .. 3,204,000 FOH (Total) 1,885,600
Sales Salaries .. 200,000 Advertising Expense .. 155,000
Delivery Expense 65,000
During the year 25,000 units were completed.
Inventories December, 2008 January, 2008
Finished Goods Rs. 467,400 . Rs. 620,000
Work in Process ... 136,800 . 129,800
Materials .. 196,000 . 176,000

Requirements:
(1) Total Factory Cost (2) Cost of Goods Manufactured (3) Cost of Goods Sold
(4) Gross Profit and Net Profit (5) Per Unit Cost of Goods Manufactured

Star Pvt. Ltd
Cost of Goods Sold Statement
For the Ended December, 2008














Cost of Goods Manufactured 7,494,600






Gross Profit =
Net Profit =
Per unit Cost of goods manufactured =
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104
Unit 9

CGS # 9.7: Following Data related to XYZ Manufacturing at the end of April, 2010.
INVENTORIES
Ending Beginning
Finished Goods .. 95,000 .. ?
Work in Process . ? . 70,000
Direct Material .. 95,000 .. 90,000

Cost incurred during the period
Cost of Goods Manufactured ... 574,000
Total Manufacturing Cost 584,000
Factory Overhead .. 167,000
Direct Material Used . 193,000

During the year 15,000 units were completed.
Requirements:
(a) Prime Cost (b) Cost of Goods Sold (c) Per Unit Cost (d) Conversion Cost

XYZ Manufacturing
Cost of Goods Sold Statement
For the Ended April, 2010




















Per unit Cost of goods manufactured =
Conversion Cost = Direct Labor + FOH =
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105
Unit 9

CGS # 9.8: Account Department of the ABC Co. provides the following data at end of June 2009, you are required to
prepare Cost of Goods Manufactured; Cost of Goods Sold; find out Gross Profit / Loss & Net profit / Loss and Per unit
Manufacturing Cost at the Year ended May 30
th
, 2009, assuming that Net Sales of Rs. 72,000, Marketing Expense 5%,
Advertising Expense 1 % and Other Expense 3% of Net Sales; Net Purchases Rs. 36,000 and Direct Expenses are 1 % of Net
Purchases; FOH 2/3 of Direct Labor and Direct Labor cost is Rs. 15,000. Units are produced during the period was 5,000.

Beginning Inventories Rs Ending Inventories Rs
Finished Goods . 7,000 . 10,200
Work in Process 8,000 15,000
Material . 8,000 . 8,500

XYZ Manufacturing
Cost of Goods Sold Statement
For the Ended June, 2009

Cost of Goods Sold Rs. 50,660

Gross Profit =
Net Profit =

Per Unit Manufacturing Cost =
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106
Unit 9

CGS # 9.9: Following data has been extracted fromthe books of City Company; you are required to prepare Cost of Goods
Manufactured, Cost of Goods Sold Statement, Gross Profit / Loss and Net Profit / Loss at the end of September 30
th
, 2009.

Stock of Raw Material (Opening) 25,000 Electricity Expense 600
Freight Inward 8,500 Selling Expenses 6,000
Freight outward 6,000 Miscellaneous Expenses 14,000
Wages 18,000 Stock of Raw Material (Closing) 2,000
Sales 418,000 Stock of Finished Goods:
FOH 26,000 Opening 30,000
Return inward 5,000 Closing 40,000
Return Outward 3,500 Provision for Doubtful Debts 8,500
Factory Fuel and Power 8,000 Depreciation 4,000
Work in Process (Opening) 7,000 Purchases of Raw Material 250,000
Work in Process (Closing) 4,000 Bank Interest Received 2,600
Repairs to Office building 4,650 Direct Labor Cost 16,000



CityCompany
Cost of Goods Sold Statement
For the Ended September, 2009











Prime Cost 320,000





Cost of Goods Manufactured 349,000
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Unit 9



Cost of Goods Sold Rs. 339,000

Gross Profit =
Net Profit / Loss =

CGS # 9.10: Following data has been extracted fromthe books of AAA Wood Company; you are required to prepare Cost of
Goods Sold Statement, Gross Profit / Loss and Net Profit / Loss at the end of June 30
th
, 2008.
Cash 810
Account Receivable 1,878
Allowance for doubtful accounts 90
Direct Material Inventory, July 01, 2007 375
Work-in-process, July 01, 2007 450
Finished goods, July 01, 2007 333
Carriage inward 54
Factory Equipments 5,880
Accumulated Depreciation _ Factory Equipment 1,695
Office Equipment 1,842
Accumulated Depreciation _ Office Equipment 738
Account Payable 1,113
Miscellaneous Expenses Payable 366
Capital 7,167
Net Sales 16,290
Net Purchases 3,201
Direct Labor 4,605
Factory Overheads 3,687
Selling Expenses 2,616
Administrative Expense 978
Income Tax 750
Total Rs. 27,459 Rs. 27,459

Inventory on June 30
th
, 2008 are
Direct Material Inventory Rs. 453; Work-in- Process Inventory Rs. 294 and Finished Goods Inventory Rs. 402
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108
Unit 9

A A A WoodCompany
Cost of Goods Sold Statement
For the Ended June, 2008




















Gross Profit =
Net Profit =