Topic presented:

COST SHEET

By:
KUSHAN MACCHAR
Any idea about :

COST SHEET ???

 What is Costsheet?
Form prepared for each job or department.

 It serves as a means of accumulating the manufacturing costs-

direct materials, direct labor, and overhead costs-chargeable to
the job or department and as a means of determining unit costs

Cost sheets may serve as a subsidiary ledger supporting a Work-

in-Process Control.
Advantages:

 Shows the cost of total output.

 Shows the cost of cost per unit.

Contd.

 Shows the break up of the total cost.

 It helps in the preparation estimate for

tenders.
Contd.

 It helps to fix Selling Price.

 It figures to maintain close control over the

cost of production.
Classification of costs

Product costs: The costs of manufacturing our

products.

Period costs:These are the costs other than

product costs that are charged to, debited to, or
written off to the income statement each period.
Cont..

Direct costs: Direct costs are generally seen

to be variable costs and they are called direct
costs because they are directly associated with
manufacturing. In turn, the direct costs can
include:
Contd.

Direct materials: plywood, wooden battens,

fabric for the seat and the back, screws.

Direct labour: drillers, assemblers, painters,

polishers.
Cont..

Indirect Costs: Indirect costs are those

costs that are incurred in the factory but that
cannot be directly associate with manufacture. 
Contd.

Indirect labour: Labour costs of people

who are only indirectly associated with
manufacture: management of a department or
area, supervisors, cleaners, maintenance and
repair technicians .
Contd.

 Indirect expenses: Essentially, if a cost is a

factory cost and it has not been included in
any of the other sections, it has to be an
indirect expense.
What is factory cost?

 Total cost of making a product at the

production location, and comprising of raw
material , labor , and overhead costs.
Contd.

Total factory cost is equal to total direct

materials cost plus direct labor cost plus
Factory overhead.
What is prime cost?

 In manufacturing, Direct Material plus Direct

Labor. It excludes overhead.

 Formulaof prime cost can be written as:

Prime cost  = Direct materials + Direct labor
What is cost of production?

 Production cost is combined costs of raw

material and labor incurred in producing
goods cost - the total spent for goods or
services including money and time and labor.
What is cost of sales?

 Infinancial accounting, cost of goods sold

(COGS) includes the direct costs attributable
to the production of the goods sold by a
company.
Contd.

 This amount includes the materials cost used

in creating the goods along with the direct
labor costs used to produce the good.
Contd.

 Itexcludes indirect expenses such as

distribution costs and sales force costs. COGS
appears on the income statement and can be
deducted from revenue to calculate a
company's gross margin.
What is Administration cost?

 Literally the costs of running the administrative

aspects of an organisation.  Administration costs
will include :
 salaries,
 rent,
 Council Tax,
 electricity,
 water,
 telephone,
 depreciation, a potentially infinitely long list.
What is finance cost?

 Finance costs are those costs associated with

providing the permanent, long term and short
term finance. 
Contd.

 Thatis, within the section headed finance

costs we will find dividends, interest on long
term loans and interest on short term loans.
THANK YOU:
KUSHAN MACHHAR