Cost Accounting

Cost Sheet Format – Meaning & Objectives Of Cost Sheet

What is cost sheet Thus cost sheet is such statement in which all the expenses or all the components of cost of production are shown from start to end. Per unit cost of each component may also be shown in cost sheet. Cost sheet may be prepared weekly, monthly, quarterly, or for any other certain period. Cost sheet generally may reveal the following informations – 

  1. Quantity or units of produced items in a particular period
  2. Direct material, direct labour and direct chargeable expenses in a particular period used in production
  3. Estimation of indirect expenses in a particular period and allocation to different heads 
  4. The relation of different components of cost with other components of cost is also known in cost sheet method.
  5. Comparison of old record with new one is also possible in cost sheet method
  6. If it is possible the certified cost may also be shown in cost sheet method
  7. Profit and loss statement may also be added in cost sheet.

Cost Sheet Format

Particulars  ₹ Total costPer unit cost
Opening Stock of Raw Material….
Add Purchase of Raw Materials….
Add Carriage Inward….
Add Freight on Material….
Less Purchase return of Material (….)
Less Closing stock of raw Material(….)
Raw Material Consumed….
Add Direct Wages/Labour….
Add Other Chargeable Expenses/Direct EXp….
Prime Cost….….
Add Work Oncost/Factory Overheads
Indirect Material
Indirect Labour
Heat, Light &Power
Depreciation of Machinery
Repairs of Machinery
Insurance of Factory Machinery
Factory Lighting
Oil &Water Charges
Factory Supervision
….
Add Opening Work-in-progress….
Less Closing Work-in-progress….….
Work Cost….
Add Office & Administrative Expenses
Salary of Office Staff
Depreciation or of Office Building
Lighting of Office
Bank Charges
Donations
Postages & Telegrams
Audit Fees
Printing and Stationery
Phone, Photostate, Fax 
Internet charges
….
Cost of Production….….
Add Opening Stock of Finished Goods….
Less Closing Stock of Finished Goods(….)
Cost of Goods Sold….
Add Selling and Distribution Expenses
Advertisement
Bad Debts
Legal Charges
Rent of Warehouse 
Delivery Van Expenses
Selling Expenses
Distribution Expenses
Commission on sale
Reception, Refreshment Expenses
Collection Charges
Showroom Expenses
Entertainment Expenses
Salesman’s Expenses
Branch Expenses
Carriage Outwards
Traveling Expenses
Website Expenses
….
Cost of sale….….
Profit/Loss….….
Sales….….

Cost Sheet Objectives

  • To know the total cost of production
  • To know the cost of production per unit
  • To Control the cost of production
  • To fix up the selling price of the product
  • To fulfill the tender price
  • For comparative study with past standards
  • Helpful in formulating production policy

Difference in Cost Account and Cost Sheet

  • Cost account is prepared in account form having debit and credit portions while cost sheet is prepared particular period and for particular production.
  • Cost accounts are prepared on the basis of double entry system while cost sheet is  a memorandum of particulars in statement form.
  • Cost accounts are prepared on the completion of work or period while cost sheet may be prepared during the production process.
  • Cost accounts are useful for comparing it with financial accounts because of the quality of preparation of accounts at the end of the work or period. 
  • Cost accounts can be prepared with the help of cost sheet but cost sheet can not be prepared easily with the help of cost accounts.
  • In cost accounts the costs are shown precisely and briefly while in cost sheet these are shown widely and analytically.

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