Cost Sheet

(Statement of Cost)
For the period……….
(No. of units produced…)
Total Cost Cost per unit
Rs. Rs.
Direct Materials
+ Direct Labour
+ Direct Expenses
Prime Cost
+ Works (Factory) Overheads
Works (Factory) Cost
+ Administrative Overheads
Cost of Production
+ Selling and Distribution Overheads
Total Cost (Cost of Sales)
+ Profit (- Loss)
Sales

Cost Sheet
(Statement of Cost)
 For the period……….
(No. of units produced…)
Total Cost Cost per unit
Rs. Rs.
Direct Materials
Opening stock of Raw Materials
+ Purchases
-Closing stock of Raw Materials
Direct Materials Consumed
+ Direct Labour
+ Direct Expenses
Prime Cost
+ Works (Factory) Overheads
Gross Works (Factory) Cost
+ opening stock of Work in progress
-closing stock of Work in progress
Net Works (Factory) Cost
+ Administrative Overheads
Cost of Production
+ opening stock of Finished goods
- closing stock of Finished goods
Cost of Goods Sold
+ Selling and Distribution Overheads
Total Cost (Cost of Sales)
+ Profit (- Loss)
Sales

Exhaustive list of OHs

Works (Factory) Administrative Selling and
 Distribution
Indirect Materials Office salaries Sales men salaries
Indirect Labour Rent and taxes Rent and taxes (sales
Leave wages (Office) office/ show room)
Overtime wages Insurance(Office) Insurance(sales
Fuel and power Lighting (Office) office/ show
Rent and taxes Stationery and room/delivery vans)
(factory) printing (Office) Lighting (sales office/
Insurance(factory) Canteen and welfare show room)
Lighting (factory) (Office) Stationery and
Stationery (factory) Directors’ fees printing (sales office/
Canteen and welfare Sundry Office show room)
(factory) expenses Canteen and welfare
Supervision Depreciation of office (sales office/ show
Repairs –equipments/furniture room)
Haulage Subscription to trade Directors’ fees
Works salaries journals Sundry sales
Depreciation of plant Establishment charges expenses
and -machinery Directors’ travelling Depreciation of –
Sundry Works fees sales equipments/
expenses Postage sales office furniture
Gas and water Legal charges
Drawing office Auditors’ fees
salaries
Technical directors’
fees
Laboratory expenses
Works telephone
expenses
Internal transport

Items excluded from cost:

Certain expenses/ losses that are finance in nature and do not form part
of the cost of the product/service are excluded from cost. These include
the following.
Cash discount Interest on loan
Preliminary expenses written off Good will written off
Provision for taxation Provision for bad debts
Transfer to reserves Donations
Tax paid Dividend paid
Profit/loss on sale of fixed assets/investment
Damages/compensation payable

 Direct materials + Direct labor + Direct expense = Prime cost

 Prime Cost +Factory overheads = WORKS COST
 Works cost +office and Administrative overheads = Cost of
goods sold
 Cost goods sold + Selling and Distribution Overheads = Total
cost
 Total cost +/- Profit/ Loss = Sales
PROBLEMS ON COST SHEET
1. From the following particulars prepare cost sheet for the period 31.12.2018
 Direct materials - 1,00,000(PC )
 Direct wages - 30,000(PC)
 Wages for foreman- 2,500 (f
 Electric power- 500 F
 Lighting (factory )- 1500 F
 Office lighting -500 O
 Storekeepers wages – 1,000 (F
 Oil and water- 500 F
 Factory rent- 5,000 F
 Office rent- 2,500 o
 Repairs of factory plant- 3,500 F
 Repairs of office premises – 500 o
 Transfer to reserves – 1,000 (non -cost item )
 Discount on shares- 500 (non cost item )
 Depreciation on factory plant- 500 F
 “ on office premises- 1950 o
 Manager’s salary- 5,000 o
 Consumable stores- 2,500 F
 Directors fee- 1,250 O
 Office stationary – 500 O
 Telephone charges – 125 O
 Postage and telegrams- 250 O
 Salesman’s salary- 1,250 S&D
 Traveling expenses- 500 S&D
 Advertising – 1,250 S&D
 Warehouse charges- 500 S&D
 Sales- 1,89,500
 Carriage outward- 375 S&D
 Income tax- 10,000 Non cost
 Dividend- 2,000 (non cost item )
Solution:
Cost Sheet for the year ended 31/12/2018 of Anitha Ltd
Particulars Amount Total cost
Direct materials 1,00,000
Direct labor 30,000
Prime cost 1,30,000
Add: Factory Overheads
Wages for foreman
Electric power
Lighting
storekeeper wages
oil & water
Rent
Repairs
Depreciation
Consumable stores
17,500 17,500
Works cost 1,47,500
Add: Office Overheads
Lighting
Rent
Repairs
Depreciation
Managers salary
 Director’s fee
Office stationary
Telephone
Postage and telegrams
11,875 11,875
Cost of production 1,59,375
Add: Selling and Distribution
overheads
Salesman salary
Travelling expenses
Adverting
Warehouse charges
Carriage outward
3,875 3,875
TOTAL COST 1,63,250
ADD: PROFIT 26,250
SALES 1,89,500

2. The following information are taken out from the books of Anitha
firm
Stock on 1.1.19
R/M 22,000
WIP 5280
Finished goods (1,600 tons) 17,600
Stock on 31.12.19
RM 24,464
WIP 17,600
FG (3200 tons) 35,200
Purchase of RM 1, 32,000
Direct wages 1, 10,000
Carriage inwards 1,584
Production overheads 44,000
Administration overheads – 8,800
Sales – 3, 30,000
Advertisement cost is Rs. 2 per ton sold. Production during the year
25,600 tons. Prepare statement of cost.

Solution:
Cost Sheet for the year ended 31.12.2019
Elements of Cost Amt Total cost Cost per unit
Direct materials
Opening stock of RM
+ Purchases
+ Carriage inward
1,55,584
- Closing stock of 24,464
RM 1,31,120
RM consumed 1,10,000 (2,41,120/25600)
+ Direct wages 2,41,120 9.42
PRIME COST
Add: Factory Overheads 44,000
Prod OH 5,280
+ Op WIP 49,280
17,600 31,680
- Clg WIP 2, 72,800 10.66
WORKS COST
Add: Office Overheads 8,800
Office 17,600
+OP FG 35,200 (8800)
- Clg stock 2,64,000 11.00
COGS
Add: S& D OHs 48,000 48,000 2
Advertisement cost
(24,000*2) 3,12,000 13
TC 18,000 0.75
Profit 3,30,000 13.75
Sales
Note: Calculate no of units sold
No of units sold = Opening stock FG+ production units – closing stock
FG
= 1600+ 25600 – 3200
No of units sold = 24,000

3. A factory produces a standard product from the following information

.Prepare a cost sheet for the year ended 31.12.2019

Particulars 1/1/2019 31.12.2019

RM 10,000 4,000
WIP 10,000 8,000
FG 1000 units 2,000 units
Purchase of RM 85,000
Direct wages 20,000
Direct expenses 10,000
Sale of scrap 2,000
Factory OHs 100% on Direct wages
Office OHs 10% on works cost
Donation paid 2,000
Income Tax 5,000
S&D OHs Rs. 2 per unit sold
Sales 9,000 units
Profit @ 20% on selling
price

4. Details of Shubham Ltd for the year 2019

Direct wages 6,00,000
Purchase of RM 7,20,000
Other materials purchased 36,000
Carriage 8,640
Wages supervisor 48,000
Other direct wages 6,000
Cost of Research and Expenses 30,000
Office salaries 72,000
ESI (Employee State Insurance) 6,000
Power and Fuel 36,000
Printing and Stationary 12,000
Income tax paid 22,000
Donations paid 5,000
Drawing office expenses 36,000
Salary 12,000
Stock on 1.1.2019
RM 1,20,000
WIP 28,800
FG 1000 units
Stock on 31.12.2019
RM 1,33,440
WIP 96,000
FG 12,000 units
Sales 18,00,000
Production during the year 96,000 units S & D OHs to be charged @ Rs. 1 per
unit sold .Prepare statement of cost.

Profit = Rate of profit * Total cost / 100- Rate of profit

Or IF TC is 80%----1,00,000
Then profit of 20%----?