cost sheet123

8/4/2019 Cost Sheet123

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Cost sheetCost sheetMahesh gowdaMahesh gowda

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What is Cost sheetWhat is Cost sheet

The purpose of cost sheet is to determine sellingprice per unit (S.P.P.U). At the beginning of the

year. Hence who take all the cost to find cost of

sales and arrive at cost per unit, to that we addprofit margin and can get (S.P.P.U).

ThusCost price + profit = selling price.

OR

cost price loss = selling price.


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Types of cost

Direct cost Indirect cost

Direct Raw material consume

Direct labour

Direct expness

Factory overheads

Administration overheads

Selling and distribution overheads


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I. Direct cost

Direct cost is an cost related to direct productionactivity.

Generally direct cost come in to picture in caseofmanufacturing activity.

It is also known as prime cost

It involves 3 things

1. Direct raw martial consume.

2. Direct labour.

3. Direct expness.


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1. Direct Raw material consume

This is also known as basic raw material input or input

material

Raw material without which the production activity cannot bestored.

This raw material is required to every manufacturer in case

of production activity. (making activity)

For example: Wood in case offurniture. Cotton in case ofcloths

Leather in case ofshoes.

Gold in case ofjewellary.

Steel in case ofwhistles.

Paper in case ofnote book.

Plastic in case ofpen.

Fuel in case ofcar. Continue


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Direct Raw material consume

Opening stock of raw material.+ Purchase of raw material.- Purchase return of raw material.+ Buying expenses (inward expenses) related to raw

material.- Closing stock or raw material.

=Direct Raw material consume

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Inward Expness/Buying Expness

Custom duty

Import duty

Dock chargesClearing charges

Octori duty

Unloading charges

Buying expness/Inward expness

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Primary packing

All the expness which are incurred to save theproduct (protect and preserve the product in thesome conditions

For example: jute bag used to protect wheat,rice etc in the transport or in case of ration.

Note: Primary packing can be taken either in rawmaterial consumed or factory overheads.

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2.Direct labour

It is also known as direct wages/productive labour/productive wages

It is a remuneration paid to the workers forproductive activity directly related to the production.

For example: any work or any manufacturing willstop in the worker goes for strike or lack outs.

It is part ofdirect cost.


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3.Direct expness

Direct expness is a part ofdirect cost.Direct expness are also known as chargeable expness.

Direct expness are the expenses incurred in the

manufacturing process to meet the specificrequirement of specific customer.

The product has to be carried on as per thespecification given by the special customers.

The manufacturer has to incurred addition expnessregard labour and material to meet the specificrequirement.


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II.Indirect cost

Indirect cost is an cost which is incurred and is notdirectly related to the production activity.

Indirect cost are also known as overhead/cost

burden

Indirect cost includes,

a)Factory overheads.

b)Administration overheads.

c) Selling and distributionoverheads.


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a)a) Factory overheads.Factory overheads. Supervisor salary

Indirect wages Indirect labour

Unproductive wages

Unproductive labour

Factory manager salary

Worker manger salary

Salary of watchman

Indirect material

Indirect expness

Factory insurance

Repairs and maintenance of

machinery

Factory lighting and heating

Machinery upkeep

Oil/ grease/ coal/ crude oil.

Depreciation on factory assets

Depreciation on plant and

machinery

Manufacturing expness

Production expenses

Power / fuel/ motive power

Consumables

Factory cleaning

Excise duty

Research and laboratory expness

Employees state insurance

corporation. Continue


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Factory expness are expness which areincurred indirectly to help the productioninside the factory.

Factory overheads is generally calculated asa percentage of direct wages.


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Administration overheadsAdministration overheads

Office overheadsOffice on cost

General expenses

Legal expenses

Audit charges/ bank charges

Salary on staff

Administration manager

salary

Director fees / remuneration

Printing and stationary

Depreciation on officebuilding

Depreciation on office

computer

Rent and rates of offices

Estimation expenses

Stationary and consumables

Postage / fax / telex

office upkeep

General office manager

salary Continue


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This are amount of expenditure incurred for

managing and controlling business.It is being calculated as percentage of factory

expenses cost.

For example:

Factory cost 5000

Administration overheads 25%on factory cost.

Administration overheads=5000*25

100

Administration overheads=1250


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c)Selling and distribution expenses

Selling cost

Selling burden/ overheads

Sales promotion expenses

Advertisement

Depreciation on deliveryvans/vehicles

Secondary packing

Packing

Packing material

Carriage/ freight outward

Commission on sale

Salarys to sales staff

Rent/repairs/lighting/depreciation of show room

Depreciation of warehouse

Sales of sales office

Travelers salaryTraveling and conveyance

Loading expenses

Upkeep of delivery van

Sales manager salary

Donation of goods

Discount allowed

Rent of warehouse Continue


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These are the expenses which are incurred to induce thecustomer to buy our product and making productavailable to the customer.

These are calculated at time as a percentage of salesan as a percentage of cost of sales.

Any expenses related to warehouse and showroomwill come in the sales and distribution expenses.

For example:Sales is 5000

Sales overheads 25%on factory cost.

Sales overheads=5000*25

100

Sales overheads=1250


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Purely finance expenses

Cash discountBad debts

Bad debts written off

Income tax/wealth tax

Interest on capital

Donation/charges

Fire/penalties

Bank interest

Interest on borrowing/debenture/Intereston capital loan taken

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Good will written offPreliminary expenses written off

Underwriters expenses written offMiscellaneous expenses written off

Written off

DividendsInterim dividend

proposed dividend

Equity dividend

TransferTransfer to general reserve

Transfer to sinking funds

Transfer to capital reserve

LosesLosses on scrap of plant and machinery

Loses on sales of fixed assets


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Purely finance Income Profit on sales of fixed assets

Profit on sales of investment Dividend received

Rent received

Interest on investment (Bank fund, Govt

bonds, RBI) Interest on loan given

Share transfer fees

All the above expenses and income are exhaustive list which are to beconsidered only for accounting purposes.

For costing analyses such above expenses and income as to beexcluded that means it would be forming a part of factory costing record

Factory overheads non administrative factor nor selling anddistribution expenses.


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