cost sheet is prepared to analyse the components of total cost thereby determining i 616338
Analysis of the Components of Total Cost
An analysis of the total cost of production and cost of sales is carried out by preparing “Cost sheet”. A Cost sheet is an important document prepared by the costing department. Cost sheet is prepared to analyse the components of total cost, thereby determining (i) prime cost, (ii) works cost, (iii) cost of production, (iv) cost of sales and (v) profit. All aspects discussed are presented in the format or specimen of a cost sheet which is shown inTable 1.6:
Specimen of Cost Sheet
COST SHEET
For the period ended….
|
Particulars |
Amount (Rs.) |
|
1. Direct Material |
– |
|
2. Direct Labour |
– |
|
*13. Direct Expenses |
– |
|
4. PRIME COST (Add 1 + 2 + 3) |
×× |
|
5. Add: Factory overhead |
– |
|
6. WORKS COST (or) FACTORY COST {Add 4 + 5} |
×× |
|
*27. Add: Administration overhead |
– |
|
8. COST OF PRODUCTION (6 + 7) |
×× |
|
9. Add: Selling and distribution overhead |
– |
|
10. TOTAL COST (or) COST OF SALES |
×× |
|
11. PROFIT |
– |
|
12. SALES |
×× |
Cost Sheet Depicting Components of Total Cost
- ABC Co Ltd. is engaged in the manufacture of product “P”. Its records reveal the following data for 31 March 2010:
- Direct Wages: Rs. 20,000
- Factory overhead: 125% of direct wages
|
31 March 2009 Rs. |
31 March 2010 Rs. |
|
|
Raw Materials |
10,000 |
12,000 |
|
Work-in-progress |
15,000 |
17,000 |
|
Finished goods |
30,000 |
25,000 |
|
Administration overhead |
5,000 |
|
|
Purchases |
70,000 |
|
|
Selling overhead |
7,000 |
|
|
Sales for the year |
1,50,000 |
- Prepare a cost statement.