COST SHEET

OBJECTIVES 1. 2. 3. State the meaning and type of cost sheet Explain components of cost sheet Prepare the cost sheet as per format

COST SHEET: MEANING AND IMPORTANCE

DEFINITION Cost sheet is a statement which shows various components of total cost of a product USES Classification and anlaysis of cost components of a product Comparison with previous data Display of unit cost with total cost Selling point finalisation with the help of cost sheet

BASIS OF OF SHEET
1. HISTORIC COST 2. ESTIMATED COST HISTORIC COST Historic cost sheet is prepare on the basis of actual cost incurred ESTIMATED COST Estimated cost sheet is prepared before the commencement of production on the basis of estimated cost It is used in quoting tender price of a job or a contract

Importance of cost sheet

Cost ascertainment Fixation of selling price Help in cost control Faciltates management decision:
Whether to produce or buy a component What prices to quote in the tender Whether to retain or replace an existing machine

COMPONENTS OF TOTAL COST

PRIME COST Direct material+Direct wages+Direct Expenses Direct Material Material consumed=material purchased+opening stock of materialclosing stock of material

PRIME COST

FACTORY COST/WORKS COST/PRODUCTION COST

FACTORY COST= Prime cost+Factory Overheads Factory Overheads consist of cost of indirect material, indirect wages and indirect expenses incurred in the factory

Factory Cost is also known as Works Cost or Production Cost or manufacturing cost

FACTORY COST

WORK- IN -PROGRESS
Units remaining to be completed at the end of a period are called work in progress Adjustment for WIP to be made to arrive at net Factory cost/Works cost Normally the cost of incomplete units include direct material, direct labour, direct expenses and average factory overheads

WORK-IN-PROGRESS

TOTAL COST AND COST SHEET

Total cost of production=Factory Cost+Office and administration overheads COST OF GOOD SOLD Cost of Goods Sold=Total cost of Production+Opening stock of Finished Goods-Closing Stock of Finished Goods

TOTAL COST SHEET

TOTAL COST-COST OF SALES

TOTAL COST=Cost of Goods sold+Selling and Distribution Overheads SALES= Total Cost+ Profit

COST OF GOODS SOLD

COST OF SALES
TOTAL COST= Cost of Goods Sold+Selling and Distribution Overheads SALES= Total Cost+Profit

TOTAL COST

SALES

SPECIMEN COST SHEET

SPECIMENT COST SHEET

COST SHEET

COST SHEET