Unit OR Output

Costing
Introduction
A manufacturing concern converts raw
materials into finished products and sells them
at a certain price. In the manufacturing process,
it incurs different types of expenses such as
manufacturing, administrative and selling and
distribution expenses.
 

Concept and meaning

 Output or unit costing is one of the important
methods of costing under which cost of
production and in turn the selling price unit are
determined. This costing method is used by the
manufacturing concern which produces
homogeneous products such as sugar, cloth,
cement and so on. A costing method used to
ascertain unit cost output is called output-
costing method.
 

Importance of output costing

A cost sheet is used to determine total and unit
cost of a product under the unit cost method.
The followings are the importance;
Simple: This method is very simple and easy to
understand.
Determination of cost: It helps to determine the
total and unit cost if production for a given
period of time.
Fixation of selling price: It helps to determine
the selling price of the product.
Elements of cost: It provides the detail
information of the cost under different heading
incorporating step-wise cost as well as total
cost.
Comparison: It facilitates to compare the
current cost with the previous period.
Corrective measures: It enables to find out the
causes of variation if any and take corrective
measures.
Tender sheet: It helps in the preparation of
tender sheet for submitting tender price with fair
degree of accuracy and reliability.
Decision making: It facilitates for making
different types of decisions and formulation
policy of the manufacturing concern.
 
Cost sheet or statement of cost
A cost sheet is a periodical statement, which is
designed to show in detail all the elements of
cost of good manufactured. The elements of
costs are prime cost, factory cost, cost of
production and total cost. In simple words, a
statement which is designed to show the total
cost as well as cost per unit of output for the
given period of time is called cost sheet.
 
  Manufacturing account
Manufacturing account is the alternative method
of determination of total cost and fixation of
selling price. The manufacturing needs to
ascertain the cost of goods manufactured and
manufacturing profit or loss during the year.
Therefore, an account is prepared for the
purpose, which is known as manufacturing
account. Generally, it is prepared by such
concerns which do not have cost office and
maintain any cost account.
 

Features of manufacturing account

The opening and closing stock of finished goods
are not recorded because the purpose of
preparation of the account is, to determined cost
of goods manufactured and manufacturing profit
during the specified period. This represent
ledger account consisting of debit and credit
side. the difference between two sides will be
cost of goods manufactured or manufacturing
profit/loss based on the type of manufacturing
account.
What is manufacturing?
Manufacturing is the process of transforming
raw materials into finished goods through the
use of tools, machines, and labor. It is a vital
part of the global economy, and is responsible
for the production of many of the products that
make life easier and more enjoyable.
What is an example of manufacturing?
An example of manufacturing is the production
of automobiles. This process involves a range of
activities, such as designing and engineering the
vehicle, procuring the necessary parts and
materials, assembling the parts, and testing and
inspecting the finished product.
What are the 4 types of manufacturing?
 Job production
 Batch production
  Flow production
 Mass production

What is the manufacturing industry?

The manufacturing industry is the sector of the
economy that is responsible for the
transformation of raw materials and components
into finished goods for sale. It encompasses
everything from the production of finished
products to the assembly of components. It
includes a variety of businesses involved in the
production of goods, such as electronics,
furniture, food and beverage, apparel,
automotive, and medical products.
 Basic Information
Type: Food and Beverage Company
Country of Origin: Switzerland
Founded: 1866, Vevey, Switzerland
Founder: Henri Nestlé
Headquarters: Vevey, Switzerland
CEO: Ulf Mark Schneider (Jan 1,
2017)
Number of 275,000(2022)
employees:
Net income: 9.596 billion CHF (2022)
Revenue: 94.42 billion CHF (2022)
Total assets: 135.2 billion CHF (2022)
Subsidiaries: Nestlé Purina Pet Care
 Company, Nestlé
India, MORE

Nestlé was formed in 1905 by the merger of the

"Anglo-Swiss Milk Company", which was
established in 1866 by brothers George and
Charles Page, and "Farine Lactée Henri Nestlé"
founded in 1867 by Henri Nestlé.
Nestlé is the world's largest food and
beverage company. They have more than 2000
brands ranging from global icons to local
favorites, and they are present in 191 countries
around the world.
 Purpose of the company:
“Nestlé. Unlocking the power of food to
enhance quality of life for everyone, today and
for generations to come.”
It constantly aims to push the boundaries of
what is possible with food, beverage and
nutritional health products to promote better
health, greater accessibility and affordability,
effortless preparation, protection of our natural
resources and enjoyment.

 Business:
“We focus our energy and resources where
unlocking the power of food can make the
greatest difference.”
It applies its expertise in nutrition, health and
wellness to help people, families and pets live
happier, healthier lives. It works to protect and
restore the environment and generate significant
value for our shareholders and other
stakeholders alike.
 key non-financial performance
“We create shared value through our social and
environmental commitments.”
To measure our progress, we use a
comprehensive set of indicators that support our
business performance and generate value for our
shareholders and other stakeholders. Some key
indicators are included here – the full set is in
our Creating Shared Value and Sustainability
Report.

Products of nestle
They have more than 2,000 brands, from global
icons to local favorites. They sell everything
from baby food and bottled water to cereal and
healthcare nutrition products. Their biggest
brands include Nescafé, KitKat, Nespresso,
Maggi, Toll House and Milo. Here is a list of
some of our major Brands, and you can read
more in this dedicated Brands section.

Nestlé supports individuals and families to make

tastier and healthier choices with all the
products we sell.
They assure that they know how important it is
for people to enjoy a healthy diet, so they’re
reducing salt, sugar and saturated fats in their
foods. They’re also adding more wholegrains,
fiber and vegetables, as well as essential
nutrients.