How to prepare the cost sheet for tender and quotation

The furniture dealers issues an order to the chair manufacturer company for a thousand chairs and asks him to send the details. (quotation)

Prepare 1000 unit cost sheet based on cost details for the previous month

previous month cost sheet
Purchased Raw Materials	closing Materials	Materials consumed	scrap vaue	Materials cost	direct labour	direct exp	prime cost	Factory Overhead 40% of labour	Factory & work cost	W I P opening	W I P closing	Office & Admin Overhead 10% of work cost	Cost Of Goods Production	unit
1000	(-)200	800	(-)250	550	250	130	930	100	1030		(-)297	103	836	160

openig and closing stock details

raw material

➩ raw material purchased $1000 ( at $200 per unit) opening raw material $1000

➪ 4 pieces consumed to production closing raw material $200

work in progress

➩ :The production of 30 ( at $29.7 per unit)wood pieces was made by 4 pieces of wood openig work in progress $891

➪ :20 pieces consumed to production closing work in progress $297

Finished goods

➩ :The production of 160 ( at $5.225 per unit) Chair was made by 20 pieces of wood opening finished goods $836

direct cost

Raw Materials

raw material purchased $1000 ( at $200 per unit)
Transport Charges $10
Labour Charges $60

work in progress

Cutting Machine Charges $20
Labour Charges $90
Electric Charges $20

Finished Goods

Cutting & Fitting Expenses $60
Labour Charges $100
Electric Charges $20

indirect cost

Factory Overhead (40% Of Labour)
Office & Admin Overhead (10% Of Work Cost)

Selling and distribution overhead should not be included in goods purchased directly from the company Because there is no cost of sale to sell the goods

Cost sheet of production per thousand units
month	Purchased Raw Materials	closing Materials	Materials consumed	scrap vaue	Materials cost	direct labour	direct exp	prime cost	Factory Overhead 40% of labour	Factory & work cost	W I P opening	W I P closing	Office & Admin Overhead 10% of work cost	Cost Of Goods Production	unit
1	1000	(-)200	800	(-)250	550	250	130	930	100	1030		(-)297	103	836	160
2	1000	(-)200	800	(-)250	550	250	130	930	100	1030		(-)297	103	836	160
3	1000	(-)200	800	(-)250	550	250	130	930	100	1030		(-)297	103	836	160
4	1000	(-)200	800	(-)250	550	250	130	930	100	1030		(-)297	103	836	160
5			800	(-)250	550	250	120	920	100	1020		(-)294	102	828	160
6						100	80	180	40	220	(+)594		22	836	160
7						25	20	45	10	55	(+)148.5		5.5	209	40
1000 unit production cost	4000	-	4000	(-)1250	2750	1375	740	4865	550	5415	742.5	(-)1482	541.5	5217	160

Open the calculation sheet in the side menu. open

The method by which this cost sheet is prepared and it is benefits

Estimated four months based on the company’s regular production and cost
All purchased raw materials have been put to use
The goods are stored in the second stage(WIP) to be completed quickly despite the unexpected loss(abnormal loss)

Note

In the 5 and 6 month the company will purchase new raw materials and start production but here we are only calculating the cost of producing 1000 products so it should not be taken here

cost sheet
particular	Amount	Amount
purchased raw materials	4000
closing raw material	-
raw material consumed	4000
scrao value	(-)1250
direct material		2750
direct labour		1375
direct expenses		740
prime cost		4865
factory overhead (40% of labour)		550
factory & work cost		5415
opening W I P		742.5
closing W I P		(-)1482
office & admin overhead (10% of work cost)		541.5
cost of goods production (making 1000 chair per $5.213)		5217
profit (1.25 per unit)		1250
sales		6467

How to prepare an information report and the details that should be in it

close the calculation sheet 📕

how to calculate cost sheet

step I :The first is to gather information about the company’s production and costs

step II :The company can continue regular production for 4 months as there are too many items to produce

5 month :There is no need to buy raw materials as the company has the stock of raw materials required for monthly production

There is no need to calculate the cost of transportation as the raw materials are not procured from outside
Transportation costs $10 include labour cost $5, maintenance costs $2, and vehicle cost $3
Transportation cost Avoidance Some indirect costs are avoided but we do not divide the indirect cost into fixed cost and variable cost so we calculate on a regular basis.

Cost of production of second stage (WIP) products in the 5 month
Particualr	Purchased Raw Materials	closing Materials	Materials consumed	scrap vaue	Materials cost	direct labour	direct exp	prime cost	Factory Overhead 40% of labour	Factory & work cost	W I P opening	W I P closing	Office & Admin Overhead 10% of work cost	Cost Of Goods Production	unit
raw material cost (697.4)			800	250	550	60	?	610	24	634		-	63.4	697.4
WIP cost (30unit.cost..$880) per unit cost $29.33	-	-	-	-	-	90	40	130	36	166	-	-	16.6	182.6	880

How to find the cost of goods at each stageReed Now

6 monthProduction for the 6 month can be calculated from the second stage because the materials required for the 6 month of production are stored in the second stage

We have already calculated each stage of the product cost so now we only need to calculate the cost of switching from the second stage to the third stage.

stages cost calculate of goods cost
Particualr	Purchased Raw Materials	closing Materials	Materials consumed	scrap vaue	Materials cost	direct labour	direct exp	prime cost	Factory Overhead 40% of labour	Factory & work cost	W I P opening	W I P closing	Office & Admin Overhead 10% of work cost	Cost Of Goods Production	unit
finished goods cost	-	-	-	-	-	100	80	180	40	220	-	-	22	242

finished goods cost $242 and WIP goods cost $594 (20 unit (20 *29.7)) total cost $836

7 month Only 40 unit should be produced in the 7 month so calculate the cost of producing only 40 unit from the second stage to the third stage

Direct cost can be calculated in cross multiplication method (DM=20*40/160 = 5 × 29.7= 148.5)(DE=80*40/160 = 20)(DL=100*40/160 = 25)

Indirect cost can be calculated on a regular basis .factory cost of 40% on the direct labour (25 *40/100= 10) Administrative cost of 40% on the work cost (55 *10/100= 5.5)

stages cost calculate of goods cost
Particualr	Purchased Raw Materials	closing Materials	Materials consumed	scrap vaue	Materials cost	direct labour	direct exp	prime cost	Factory Overhead 40% on labour	Factory & work cost	W I P opening	W I P closing	Office & Administrative Overhead 10% of work cost	Cost Of Goods Production	unit
finished goods cost	-	-	-	-	-	25	20	45	10	55	-	-	5.5	60.5

finished goods cost $60.5 and WIP goods cost $148.5 (5 unit (5 *29.7)) total cost $209

this cost calculation knowing you basic of store ledger becouse it depending on store lender

Store Ledger for the raw material (FIFO)
	purchased			issued			balances
month	unit	$	amount	unit	$	amount	unit	$	amount
1	5	200	1000	4	200	800	1	200	200
2	5	200	1000	4	200	800	1	200	200
3	5	200	1000	4	200	800	1	200	200
4	5	200	1000	4	200	800	1	200	200
							4	200	800
5				4	200	800	-	-	-
closing raw material							-	-	-

store ledger for the work in progress(FIFO)
	producing			issued			balances
month	unit	$	amount	unit	$	amount	unit	$	amount
1	30	29.7	891	20	29.7	594	10	29.7	297
2	30	29.7	891	20	29.7	594	10	29.7	297
3	30	29.7	891	20	29.7	594	10	29.7	297
4	30	29.7	891	20	29.7	594	10	29.7	297
5	30	29.333	880	20	29.3	586	10	29.33	294
6				10	29.7	297	-	-	-
6				10	29.7	297	-	-	-
							10	29.7	297
							10	29.7	297
							10	29.4	294
7				5	29.7	148.5	-	-	-
							5	29.7	148.5
							10	29.7	297
							10	29.4	294
closing work in progress							25	-	739.5

store ledger for the finished goods (FIFO)
	producing			issued			balances
month	unit	$	amount	unit	$	amount	unit	$	amount
1	160	5.225	836	-	-	-	160	5.225	836
2	160	5.225	836	-	-	-	160	5.225	836
3	160	5.225	836	-	-	-	160	5.225	836
4	160	5.225	836	-	-	-	160	5.225	836
5	160	5.175	828	-	-	-	160	5.175	828
6	160	5.225	836	-	-	-	160	5.225	836
6	40	5.225	209	-	-	-	40	5.225	209
closing finished goods							1000		5217

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