Calculate Works Cost from information given below Direct Material consumed ...........

Costing - Phase (I & II) Overview of Cost and Management Accounting

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Calculate Works Cost from information given below:

Direct Material consumed: 20,000/-

Direct wages: 10,000/-

Carriage Inwards: 5,000/-

Factory overheads: @ 5/- per unit

Office overheads: @ 2/- per unit

Number of units produced: 10,000 units

Rs. 85,000/-

Rs. 55,000/-

Rs. 80,000/-

Rs. 50,000/-

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Explanation:

Factory cost or works cost is the sum total of Prime Cost and Factory Overheads. Prime cost/initial cost or direct cost is the sum total of direct material consumed, direct labour and direct expenses. Factory overheads are indirect elements of cost incurred in factory during production like indirect wages, indirect material etc. In given problem Factory Cost/Works Cost = 20,000/-+ 10,000/- + 5,000/- + 50,000 (5 X 10000) =85,000/-