Cost Sheet of M/s for the period/year ended
Units Produced =
XX Units Sold =
XX
Particulars Rs. Total Per
Unit
1. DIRECT COST
Direct Materials Consumed
Opening Stock of Raw xx
Materials Add: Purchases of xx
Raw Materials Add: Carriage xx
Inward (xx)
Less: Closing stock of Raw (xx) x x
Materials Less: Sale of Material x x
scrap x x
Direct Labour x x
Direct x x
Expenses x x
PRIME COST XX XXX
2. INDIRECT COST X
Add: Factory
Overheads Expenses xx
Expenses xx
Less: Sale of factory scrap (xx) xx
xx
GROSS FACTORY COST XX XXX
Add: Opening Stock of X -
WIP Less: Closing Stock xx -
of WIP (x
x)
NET FACTORY COST XX XXX
Add: Office & Administration X
Overheads Expenses xx
Expenses xx xx
xx
COST OF PRODUCTION XX XXX
Add: Opening Stock of Finished goods X XX
Less: Closing Stock of Finished goods XX (XX)
(X
X)
COST OF GOODS SOLD XX XXX
Add: Selling & Distribution X
Overheads Expenses xx
Expenses xx xx
xx
COST OF SALES XX XXX
Add: Profit X XXX
XX
X
SALES XXX XXX
Items Included In Carriage Inwards
Freight on Materials
Carriage on Materials
Dock Charges
Import Duty
Cartage
Loading and Unloading Charges
Octroi & Custom Duty
Items Included In Direct Wages
Direct Labour
Productive Wages
Manufacturing Wages
Factory Wages
Items Included In Direct Expenses
Royalty on Production
Special Designing charges
Special Equipment hire charges
Special Dyes
Direct Power
Sub-Contracting Expenses
License fees for Special Orders
Items Included In Factory Overheads
Factory Overheads is also known as Works Overheads, Production Overheads,
Manufacturing Overheads
Factory Power
Lighting and Heating
Factory Manager’s Salary
Factory Supervisor’s Salary
Defective work (Cost of Rectification)
Drawing and Designing Expenses
Drawing Office Salaries
Factory Rent, Rates and Insurance
Technical Director’s Fees
Power and Fuel
Motive Power
Steam
Coal, Gas, Grease and Water
Excise Duty
Depreciation on Plant and Machinery
Depreciation on Factory Building
Depreciation on Patterns and Patents
Indirect Material
Indirect Wages
Repairs to Plant and Machinery
Rent of Plant and Machinery
Expenses on Trial Production
Cost of training workers
Normal Idle time wages
Setup cost
Inspection Cost
Insurance Premium for stock of Raw Material
Material handling charges
Store Keeper’s salary
Haulage Expenses
Cost of Rectification
Loose Tools w/off
Service Department Expenses
Items Included In Office Overheads
Office Rent, Rates and Insurance
Director’s Fees
Depreciation on Office Furniture
Office Lighting
General Expenses
Printing and Stationery
Legal Expenses
Postage and Telephone Expenses
Counting House Salaries
Audit Fees
Clerical Salaries and Management Expenses
Cleaning and Maintenance Expenses
Repairs and Renewal
Refreshment and other sundry expenses
Items Included In Selling and Distribution Overheads
Carriage outwards
Salesmen salaries and commission
Depreciation on Delivery Van
Travelling Expenses
Fees paid to Brand Ambassador
Advertisement and Publicity Expenses
Exhibition Expenses
Trade Fair Expenses
Showroom rent and expenses
Demonstration Expenses
Catalogue Printing
Free Samples
Fancy Packing Expenses
Warehouse Rent
Cost of tenders
Cost of mailing literature
Salaries of Packing Department
Carriage on Sales
Final Packing & Forwarding Expenses
Classification of Important Items
Royalty on Raw Material Consumed DMC
Royalty on Production D
E
Technical Director's Fees FOH
Director’s Fees O&A
Special Designing Expenses D
E
Designing Expenses FOH
Haulage Expenses FOH
Drawing Office Salaries FOH
General Office Salaries O&A
Counting House Salaries O&A
Power FOH
Direct Power D
E
Legal Expenses O&A
Legal Expenses for criminal suit Ignore
Purchases of Plant and Machinery Ignore
Purchases of Office Furniture Ignore
Purchases of Delivery Van Ignore
Depreciation of Plant and Machinery FOH
Depreciation of Office Furniture O&A
Depreciation of Delivery Van S&D
Warehouse Rent S&D
Notes relating to Cost Sheet
1. Quantity Information
Opening Stock of Finished goods XX
Add: Production (Units Produced) XX
Less: Closing Stock of Finished (XX
goods )
Sales (Units sold) XX
Note: If there is no Quantity Information in the question, there will be NO PER UNIT
COLUMN.
2. How to Find Per Unit Column
From Direct Materials consumed till Cost of Production, divide by units produced.
From Cost of goods sold till Sales, divide by units sold.
Opening stock of FG and Closing stock of FG will be divided by their respectiveunits.
3. Valuation of stock
Stock of Raw Material is valued at Purchase price of Raw Materials
Stock of WIP is valued at Factory Cost
Stock of Finished Goods is valued at Cost of Production
4. There are only 3 incomes which are included while preparing Cost Sheet
Sale of Material Scrap
Sale of Factory Scrap
Sale of Finished goods (Sales)
5. Expenses which are not included while preparing Cost Sheet
(a) Expenses not incurred for the product
Donations, Charities, Gifts
(b) Abnormal Losses
Loss by fire, loss by theft, loss by any natural calamity,
(c) Expenses incurred after earning profits
Income Tax, Provision for tax
(d) Appropriation of Profits
Transfer to Reserves, Proposed dividend, Dividend Paid
(e) Intangible Assets written off
Goodwill, Patents, Trademark, Copyrights… w/off
(f) Miscellaneous Expenditure written off
Preliminary Expenses, Discount on issue of shares or Debentures, Underwriting
Commission, Company Formation Expenses…. w/off.
(g) Financial Expenses and Losses
Interest on Loans or Debentures, Bad Debts, Provision for bad debts, Discount
allowed, Loss on sale of FA, Legal Expenses for criminal suit, fines, Penalties,
Damages etc
6. Other Notes
All Direct Cost are Variable Cost i.e. Direct Materials, Direct Labour, Direct
Expenses are always variable cost.
But all Variable Cost are not direct cost. They can be Indirect Cost also.
If total cost remains same, then the cost will be termed as Fixed Cost.
If fixed cost is to be increased or decreased, it needs to be increased or decreased
from
Total Cost.
If cost per unit remains same, then the cost will be termed as Variable Cost.
If Variable cost is to be increased or decreased, it needs to be increased or decreased
from
Cost per unit.
Production Increases, Total Variable Cost
increases Production Decreases, Total Variable
Cost decreases
Production Increases, Fixed Cost per unit
decreases Production Decreases, Fixed Cost
per unit increases
Variable Cost is known as
product cost Fixed Cost is known
as period cost
In case of semi-variable overheads (partly variable and partly fixed), variable cost
needs to be calculated by Change in Cost ÷ Change in Production and fixed cost will
be the balancing figure.
