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Cost sheet

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Raj vardhan
Raj vardhan

The document provides information on cost sheets, including their purpose and key components. A cost sheet shows the costs of production for an accounting period and breaks down total costs. It includes prime costs like direct materials, labor, and expenses. Factory costs incorporate prime costs and factory overheads. Administration costs add office overheads to factory costs. Selling and distribution costs include advertising, sales salaries, and transport costs. An example cost sheet is provided with sales, inventory, production, overhead, and expense figures.

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COST SHEETCOST SHEET
Cost SheetCost Sheet Cost Sheet is a statement designed to show the output of a particular accounting period along with the breakup of costs. It provides information relating to cost per unit at different stages of the total cost of production.
Importance of Cost SheetImportance of Cost Sheet Ascertainment of cost Controlling costs Fixation of selling price Submitting of tenders
Components of Total CostComponents of Total Cost  Prime Cost: The sum total of direct material, direct labor & direct expenses. Example: Calculate the Prime Cost from the following particulars of a carpenter for manufacturing a window: Particulars Rs. Cost of wood 10,000 Cost of glass 2,000 Cost of frames 200 Wages paid 4,000 Rent of a special machine 800
Treatment of Stock of Raw MaterialTreatment of Stock of Raw Material  The ‘direct material’ refers to the cost of material consumed. The cost of direct material is found by adjusting the opening and closing stock of materials. For e.g., from the following calculate the value of material consumed: Raw material purchased 50,000 Opening Stock 10,000 Closing Stock 8,000
 Factory Cost or Work Cost: The sum total of prime cost plus the total factory overheads or works overheads. E.g., factory rent, factory insurance, depreciation on plant & machinery, coal, gas etc. Example: Calculate factory cost from the following: Material consumed 50,000 Productive wages 30,000 Unproductive wages 3,000 Salary of factory manager 6,000 Consumable Stores 1,000 Rent of factory premises 2,500 Depreciation on machine 1,500 Oil. Grease etc 500 Salary of factory clerks 2,000 Rent of factory furniture 800
Treatment of stock of Work-In-ProgressTreatment of stock of Work-In-Progress  Work-in-progress represents the units on which some work is yet to be completed. The stock of such goods form part of works cost and adjusted while calculating the factory cost or works cost. Example: Calculate works cost from the following: Material Consumed 60,000 Labor 40,000 Direct Expenses 10,000 Factory Overheads 50,000 Opening WIP 10,000 Closing WIP 8,000
Administration Cost or Office Overheads: It is obtained by adding the office or administration overheads to works cost. It is also known as office cost or cost of production. E.g., salaries of office staff, depreciation on office building, rent & rates, taxes & insurance, printing & stationery, postage etc.
Example: Compute the cost of production or office cost from the following particulars: Particulars Rs. (‘000) Material Used 120 Labor employed 90 Lighting & heating ( Factory and office 3:2) 5 Depreciation, rent & repairs (50 % is related to factory) 10 Taxes and insurance (40% is related to office) 8 Office salaries 1
Treatment of finished stockTreatment of finished stock  Finished goods are the goods on which all the factory work has been completed. The stock of finished goods is adjusted in the cost of production. Example: Calculate the cost of goods sold from the following: Particulars Rs. Cost of production 1,00,000 Opening stock of finished goods 10,000 Closing stock of finished goods 15,000
 Selling & Distribution Cost: The selling cost or cost of sales is obtained by adding the selling & distribution overheads to cost of goods sold. The selling & distribution overhead includes advertisement, selling expenses, salesman’s salaries & commission, distribution expenses, carriage outward, transporting charges etc.
Example: Calculate the total cost or the cost of sales from the following particulars: Particulars Rs. Cost of goods sold 75,000 Selling expenses 10,000 Advertisement cost 5,000 Salesman’s salaries 10,000
Prepare a cost sheet from the following information. Particulars Units Rs Sales 80,000 8,00,000 Material Inventory 1-1-09 40,000 Material Inventory 31-12-09 32,000 W.I.P 1-1-09 55,000 W.I.P 31-12-09 72,000 Finished goods 1-1-09 16,000 64,000 Finished goods 31-12-09 34,000 1,51,265 Material Purchased 1,52,000 Direct Labor 1,45,000 Manufacturing Overhead 1,08,000 Selling Expenses 50,000 General Expenses 40,000

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Cost sheet

  • 2. Cost SheetCost Sheet Cost Sheet is a statement designed to show the output of a particular accounting period along with the breakup of costs. It provides information relating to cost per unit at different stages of the total cost of production.
  • 3. Importance of Cost SheetImportance of Cost Sheet Ascertainment of cost Controlling costs Fixation of selling price Submitting of tenders
  • 4. Components of Total CostComponents of Total Cost  Prime Cost: The sum total of direct material, direct labor & direct expenses. Example: Calculate the Prime Cost from the following particulars of a carpenter for manufacturing a window: Particulars Rs. Cost of wood 10,000 Cost of glass 2,000 Cost of frames 200 Wages paid 4,000 Rent of a special machine 800
  • 5. Treatment of Stock of Raw MaterialTreatment of Stock of Raw Material  The ‘direct material’ refers to the cost of material consumed. The cost of direct material is found by adjusting the opening and closing stock of materials. For e.g., from the following calculate the value of material consumed: Raw material purchased 50,000 Opening Stock 10,000 Closing Stock 8,000
  • 6.  Factory Cost or Work Cost: The sum total of prime cost plus the total factory overheads or works overheads. E.g., factory rent, factory insurance, depreciation on plant & machinery, coal, gas etc. Example: Calculate factory cost from the following: Material consumed 50,000 Productive wages 30,000 Unproductive wages 3,000 Salary of factory manager 6,000 Consumable Stores 1,000 Rent of factory premises 2,500 Depreciation on machine 1,500 Oil. Grease etc 500 Salary of factory clerks 2,000 Rent of factory furniture 800
  • 7. Treatment of stock of Work-In-ProgressTreatment of stock of Work-In-Progress  Work-in-progress represents the units on which some work is yet to be completed. The stock of such goods form part of works cost and adjusted while calculating the factory cost or works cost. Example: Calculate works cost from the following: Material Consumed 60,000 Labor 40,000 Direct Expenses 10,000 Factory Overheads 50,000 Opening WIP 10,000 Closing WIP 8,000
  • 8. Administration Cost or Office Overheads: It is obtained by adding the office or administration overheads to works cost. It is also known as office cost or cost of production. E.g., salaries of office staff, depreciation on office building, rent & rates, taxes & insurance, printing & stationery, postage etc.
  • 9. Example: Compute the cost of production or office cost from the following particulars: Particulars Rs. (‘000) Material Used 120 Labor employed 90 Lighting & heating ( Factory and office 3:2) 5 Depreciation, rent & repairs (50 % is related to factory) 10 Taxes and insurance (40% is related to office) 8 Office salaries 1
  • 10. Treatment of finished stockTreatment of finished stock  Finished goods are the goods on which all the factory work has been completed. The stock of finished goods is adjusted in the cost of production. Example: Calculate the cost of goods sold from the following: Particulars Rs. Cost of production 1,00,000 Opening stock of finished goods 10,000 Closing stock of finished goods 15,000
  • 11.  Selling & Distribution Cost: The selling cost or cost of sales is obtained by adding the selling & distribution overheads to cost of goods sold. The selling & distribution overhead includes advertisement, selling expenses, salesman’s salaries & commission, distribution expenses, carriage outward, transporting charges etc.
  • 12. Example: Calculate the total cost or the cost of sales from the following particulars: Particulars Rs. Cost of goods sold 75,000 Selling expenses 10,000 Advertisement cost 5,000 Salesman’s salaries 10,000
  • 13. Prepare a cost sheet from the following information. Particulars Units Rs Sales 80,000 8,00,000 Material Inventory 1-1-09 40,000 Material Inventory 31-12-09 32,000 W.I.P 1-1-09 55,000 W.I.P 31-12-09 72,000 Finished goods 1-1-09 16,000 64,000 Finished goods 31-12-09 34,000 1,51,265 Material Purchased 1,52,000 Direct Labor 1,45,000 Manufacturing Overhead 1,08,000 Selling Expenses 50,000 General Expenses 40,000