Proforma of Cost Sheet or Statement of Cost

Simple Cost-Sheet

In the books of A Company

Cost-sheet for the period ended …..
Units Produced

Particulars Total Cost Unit Cost

(Rs.) (Rs.)
Direct Materials - -
Add: Direct Labour - -
Add: Direct Expenses - -
Prime cost(1) - -
Add: Factory Overheads - -
Factory Cost(2) - -
Add: Office Overheads - -
Cost of Production(3) - -
Add: Selling and Distribution Overheads - -
Total Cost(4) - -
Add: Profit - -
Less: Loss - -
Sales(5)
 Cost-Sheet with Stock Adjustments
Name of the Product Units Produced
Particulars Total Cost(Rs.) Unit Cost (Rs.)
Opening Stock of Raw Materials - -

Add: Purchase of Raw materials (+) - -

Add: Expenses on Purchases of Raw Materials (+) - -
- -
Less: Closing Stock of Raw Materials (-) - -
Less: Purchase Returns (-) - -
Less: Sale of Scrap or Defective of Raw Materials (-) - -
Cost of Materials Consumed(1) - -
Add: Direct Labour (+) - -
Add: Direct Expenses (+) - -
Prime cost(2) - -
Add: Factory Overheads (+) - -
Add: Opening Stock of Work-in-Progress (+) - -
- -
Less: Closing Stock of Work-in-Progress - -
Less: Sale of Scrap or Defective of Work-in-progress - -
Factory Cost(3) - -
Add: Office Overheads (+) - -
Cost of Production(4) - -
Add: Opening stock of Finished Goods (+) - -
- -
Less: Closing stock of Finished Goods (-) - -
Cost of Goods Sold(5) - -
Add: Selling and Distribution Overheads - -
Total Cost(6) - -
Add: Profit - -
Less: Loss - -
Sales(7)

Direct materials: is also known as

 1. Prime cost materials
2. Cost of material consumed
3. Process Materials
4. Cost of material purchased
5. Operating materials
6. Value of raw materials used,
7. Basic materials
8. Productive material cost

Direct Labour is also known as

1. Direct Labour cost
2. Prime Cost Labour
3. Process Labour
4. Cost of material purchased
5. Operating materials
6. Basic Labour
7. Productive Labour/Wages
8. Wages paid to direct workers

Direct Expenses is also known as

1. Chargeable Expenses
2. Prime Cost Expenses
3. Productive Expenses
4. Basic Expenses
Examples:
Royalty, Hire of Special Plant, Cost of Patterns, Layout, Designs or Drawings, Architects Fees, Engineers
Fees, Surveyors Fees, License fees, Outstanding Direct Expenses, packing charges

Prime Cost is also known as

1) Direct cost, 2) Basic Cost,
2) Operating cost, 4) First cost,
3) Productive cost, 6) Flat cost

Factory Cost is also known as

Works cost, Manufacturing Cost, Production cost

Cost of production is also known as Gross Cost, Office Cost

Office Overheads is also known as

Administration expenses, management on cost, establishment
overheads

Total Cost is known as

Cost of Sales, Cost Price, Cost of Turnover, Sales cost, Turnover
cost, Net cost

Profit can be called as net Margin

Sales known as Selling Price, Value of Sales, Market Price, Value of Turnover, Invoice price,
Loaded price, Inflation price
Examples of
Factory Overheads:
Indirect materials, Factory lighting expenses, motive power, Factory Rent, Rates, Taxes, Insurance,
electric power, works stationery, Property tax on factory premises, heating and lighting, coal and coke,
steam, gas and water, power and fuel, consumable stores, normal wastage and spoilage, depreciation on
plant and machinery, tools and equipments, cost of factory supervision, time-keeping expenses,
unproductive wages, wages and salaries, labour welfare and amenities to production staff, expenses on
workers canteen, entertainment room, laboratory expenses.

Office/Administration Overheads:
Indirect material, indirect labour, indirect expenses, directors fees, Office rent, rates, taxes, insurance,
lighting etc., salaries and wages, office salaries, expenses of management, miscellaneous expenses,
clearing charges, general office overheads, printing and stationery, postage and telegrams, audit fees,
accountancy charges, conveyance, general fees, telephone charges, sundry expenses, branch expenses,
other administrative charges

Selling and Distribution Overheads:

Salaries and allowances to Sales manager, mktg executive, publicity, officer, sales office staff, travelling
salesman, carriage on sales, commission on sales, travelling expenses, showroom expenses, expenses of
delivery vans, freight outward, carriage and cartage outwards, secondary packing charges, publicity
charges, advertisement, diaries and calendars, distribution of free samples and gifts, loading and
unloading of finished goods, price list, catalogue, banners, sales promotion expenses, bad debts, debts
collection charges, cash discount allowed, tendering expenses, repairs, maintenance and renewals and
depreciation on delivery, sales depots, showrooms, sales premises etc, estimating expenses,
demonstration expenses etc.

 Items to be excluded from cost or non-cost items

Following is the summarized list of financial items which are to be excluded from the computation of
Total Cost into the books of cost accounts. These expense are purely of financial nature.
1. Financial incomes:
Capital profits, dividend received, brokerage and commission received, share transfer fees
received, interest on investments, interest on bank deposits, rent received, bad debts recovery,
interest on loan given, discount received etc.

2. Financial charges:
Capital losses, cash discount, trade discount, penalties and fines, share transfer fees paid, interest
on debentures, interest on bank loan, loss on investments, underwriting commission, discount on
issue of shares and debentures, capital expenses, salary or commission paid to salaries, income
tax, wealth tax, interest on capitals, development expenses, reorganization expenses,
reconstruction expenses, preliminary expenses etc.

3. Appropriations:
Bad debts reserve, dividends or bonus paid, charitable donations, transfer to reserves, general
reserves, sinking fund, debenture redemption fund, machinery replacement fund, investment
fluctuation fund etc.

4. Abnormal:
 Abnormal wastage, abnormal idle time, loss by fire, loss by theft, loss of stock, insurance
premium etc.

Need of Cost Classification

1. In budgeting and planning process
2. Controlling of costs
3. Pricing policies
4. Ascertainment of profits periodically
5. Current application of plans and policies

Methods of Classification
The cost may be the same, but the classification of costs are made in different ways depending upon the
specific requirement and the purpose to be achieved in a particular organizations.