Question
ABC Ltd. incurs direct material cost ₹8,00,000, direct labour ₹5,00,000, and factory overheads 60% of direct labour. Administration overheads are ₹3,00,000 and selling & distribution overheads ₹2,00,000. The company sells 10,000 units at ₹250 each. Prepare a cost sheet and find the profit.
Solution
• Factory cost = 8,00,000 + 5,00,000 + (0.6 × 5,00,000) = ₹16,00,000. • Total cost = Factory + Admin + S&D = 16,00,000 + 3,00,000 + 2,00,000 = ₹21,00,000. • Sales = 10,000 × 250 = ₹25,00,000 • Profit = sales – total cost = 4,00,000
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