What is a cost sheet and Why is a cost sheet prepared
What is cost sheet?
A cost sheet is a calculation document that records the details of how much a company produces, its costs and how much it sells, and its profits.
Why is a cost sheet prepared?
The cost sheet is prepared for basic and advanced cost calculations,
basic cost sheet calculation
- Find the cost per unit (for find the stock value)
- find the cost sheet profit
- find the G S T (output)
- Analyse cost
advanced cost sheet calculations
- If workers work 8 hours a day, monthly output is 160 units, how many days will it take to produce 1000 units and its cost,
- If the company wants to complete production of 1000 units in 3 months, how much will it cost, research report,
example -1 Basics of cost sheet calculation
| particular | Amount |
|---|---|
| Direct Labour | 250 |
| Direct Exp | 130 |
| Purchased Raw Materials |
1000 |
| Materials Consumed | 800 |
| Materials Scrap Vaue | 250 |
| Factory Overhead | 100 |
| Office & Admin Overhead 10% Of Work Cost | 103 |
| W I P Closing | 297 |
| Sale Of Goods (120) | 627 |
| Selling & Districbution Overhead | 73 |
| Sales (Per Unit $7.09) | 7.09 |
question (To find finished goods and profit)
ANS : 209, 850
| particular | Amount | Amount |
|---|---|---|
| raw material consumed | 800 | |
| scrap value | (-)250 | |
direct material | 550 | |
direct expenses | 130 | |
prime cost | 930 | |
factory overhead (40% of labour) | 100 | |
gross work cost | 1030 | |
opening W I P |
- | |
closing W I P |
(-)297 | |
factory & work cost | 733 | |
office & admin overhead (10% of gross work cost) | 103 | |
cost of goods production | 836 | |
| closing finished goods 40 per $5.225 | (-)209 | |
sale of goods (120) | 627 | |
selling & districbution overhead | 73 | |
|
cost of goods sales |
700 | |
profit | 150 | |
sales (per unit $7.09) | 850 |
It is very easy !
There is one more example, if you understand 2 examples you can find answer to all basic cost calculation calculations.
Transaction details of the chair manufacturer company .....
Direct cost
| Raw Material | amount | |
|---|---|---|
| transport charges | 10 | electric charges | 40 | . |
| labour charges | 250 | |
| Cutting & Fitting Expenses | 60 | |
| Cutting Machine Charges | 20 | |
| Electric Charges | 40 | |
| Raw Material (unit $200) | 1000 | . |
Indirect cost
| Factory Overhead (40% Of Labour) | amount | . | Office & Admin Overhead (10% Of Work Cost) | amount | . | Selling & Districbution Overhead | amount |
|---|---|---|---|---|---|---|---|
| Factory Supervisor | 60 | . | OfficeFurnitureDepreciation | 15 | . | Sales Man Salery | 30 |
| Factory Insurance | 5 | . | Salary | 74 | . | Sales Man Commision | 20 |
| Factory Electric Charge | 15 | . | Telephone And Postage | 4 | . | Advertisement | 10 |
| Maintenance Charges | 20 | . | Offices Maintain | 10 | . | Carriage Outward | 13 |
✏ Stock information 
?:
| particular | Amount | Amount |
|---|---|---|
| purchased raw materials | 1000 | |
| closing raw material | (-)200 | |
| raw material consumed | 800 | |
| scrap value | (-)250 | |
direct material | 550 | |
direct expenses | 130 | |
| Transport Charges | 10 | |
| Cutting Machine Charges | 20 | |
| Electric Charges | 40 | |
| Cutting & Fitting Expenses | 60 | |
direct labour | 250 | |
prime cost | 930 | |
factory overhead (40% of labour) | 100 | |
| factory supervisor | 60 | |
| factory insurance | 5 | |
| factory electric charge | 15 | |
| maintenance charges | 20 | |
gross work cost | 1030 | |
opening W I P |
- | |
closing W I P |
(-)297 | |
factory & work cost | 733 | |
office & admin overhead (10% of gross work cost) | 103 | |
| Office Furniture Depreciation | 15 | |
| Offices Salary | 74 | |
| Telephone And Postage | 4 | |
| Offices Maintain | 10 | |
cost of goods production | 836 | |
| closing finished goods 40 per $5.225 | (-)209 | |
sale of goods (120) | 627 | |
selling & districbution overhead | 73 | |
| Sales Man Salery | 30 | |
| Sales Man Commision | 20 | |
| Advertisement | 10 | |
| Carriage Outward | 13 | |
|
cost of goods sales |
700 | |
profit | 150 | |
sales (per unit $7.09) | 850 | |
GST 20% | 170 | |
received amount from customer (per unit $8.5 *120) | 1020 |
I Closing Stock Calculation
market prices $7.09 Per producet
cost of goods production $5.225 per producte (cost prices $5.225)
- 40 unit $5.225 = closing stock of finished goods is $209
- 10 unit $29.7 = closing stock of WIP is $297
- 1 unit $200 = closing stock of raw material is $200
which ever less throught find out closing stock
closing stock $706 book value $706 closing stock
II goods and services tax $170
III cost sheet profit $150 (it is not actual profit it just cost sheet define the profit)
IV Analyse Cost
⇏ Prime Cost $930
⇏ Factory OverHead (40% Of Labour) $100
⇏ Office & Admin Overhead (10% Of Work Cost)$103,
⇏ Cost Of Goods Production (Making 160 chair Per $5.225)$836
⇏ Selling & Districbution Overhead $73
What is the question of this second example?.
In your exam the question can be anything, find profit or find cost of production, if you understand this you can answer all questions and ask your question below…
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