COST SHEET
OBJECTIVES

1. State the meaning and type of cost sheet

2. Explain components of cost sheet

3. 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 material-
closing 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