COST SHEET
COST SHEET IS THE STATEMENT PREPARED TO CALCULATE:-
1) Total cost of production of product
2) Total profit earned or loss suffered on the sale of product.
THE TOTAL COST OF PRODCCT IS DIVIDED IN TWO GROUPS
TOTAL COST
| (A) DIRECT COSTS | (B) INDIRECT COSTS |
| 1. Material cost | 1. Factory expenses/ overheads on cost |
| 2. Labour cost | 2. Office and administration on expenses / overheads / on cost |
| 3. Other direct cost | 3. selling and distribution expenses / overheads / on cost |
- DIRECT COST:-
Direct cost is that cost which can be easily and directly identified with the cost of product. It forms the major part of total cost of the product.
For e.g. in manufacturing furniture, wood is direct cost and in manufacturing shoes, leather is direct cost.
- INDIRECT COST:-
In direct cost means the cost which cannot be easily and directly identified withthe cost of product because it cannot be accurately Measured for a single unit. For E.g. Rent of factory or supervisor’s salary in factory.
- EXAMPLES OF DIRECT EXPENSES:-
- Primary packing material.
- Any other raw material.
- Carriage inward.
- Octroi and freight.
- Wages for production.
- Examples of factory expenses / overheads/ on cost:-
- Factory rent, insurance, lighting etc…
- Factory supervision
- Welfare expenses
- Factory stationery
- Bonus to factory workers
- Examples of office and administration expenses / overheads/ on cost:-
- Office rent rates, insurance, lighting etc…
- Printing and stationery….
- Bonus to office staff…
4. Counting house salary…….. - Conveyance expenses……
- Examples of selling and distribution expenses / overhead / on cost:-
- Advertising and showroom expenses.
- Commission on sale
- Rent of sales room.
- Carriage outward.
- Salary to sales office.
- ITEMS NOT INCLUDED IN COST SHEET:-
- Profit or loss on sale of fixed assets.
- Goodwill written off.
- Underwriting commission
- Cost of assets purchased.
- R.D.D
PROFORMA OF COST SHEET
Units__________ M/s_________
Units Sold_____________ Cost sheet for the period_____________
| Particulars
1. Raw materials consumed:- X Opening stock of Raw material X Add:-Purchase of Raw material X Add:-Expenses on Purchase X
Less:- closing stock of raw material X X Less:- sale of raw material as scrap X 2. Direct wages / Direct Labour 3. Direct Expenses (Royalty / Special designed patterns PRIME COST Add:- Factory Overheads Less:- sale of scrap
Add:- Opening stock of work-in-progress
Less:- closing stock of work-in-progress WORK COST Add:- Office and Administration Overheads Cost of production Add:-Opening stock of finished goods
Less:- Closing stock of finished goods COST OF GOODS SOLD Add:- Selling and Distribution Overheads TOTAL COST / COST OF SALE Add:- Profit SALE
|
Amt
XX XX XX |
Amt
XXX |
We are thankful to Prof. Lata Ahuja for the above post.
Leave a Reply