Question

. Calculate Prime Cost, Factory Cost, Cost of Production, Cost of sales and Profit from the following details:

Direct Material	SR 10,000
Direct Labor	SR   4,000
Direct Expenses	SR      500
Factory Expenses	SR    1,500
Administrative Expenses	SR    1,000
Selling Expenses	SR        300
Sales	SR 20,000

Answer 1

Cost Sheet
Direct materials	10,000
Direct labor	4,000
Direct expenses	500
Prime cost	14,500
Factory expenses	1,500
Factory Cost	16,000
Administrative expenses	1,000
Cost of production	17,000
Selling expenses	300
Cost of sales	17,300
Profit	2,700
Sales	20,000

Prime Cost = 14,500

Factory cost = 16,000

Cost of production = 17,000

Cost of sales = 17,300

Profit = 2,700

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