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Statement of Cost Or Cost Sheet

Presented by, Group 1

What is the statement of cost?

It is a statement designed to show the output of a particular accounting period alongwith breakup costs

Advantages of maintaining the statement of cost :

Discloses the total cost and cost per unit

Close watch and control Comparative study Formulating a definite useful production policy Fixing up the selling price Minimise the cost of production

Specimen of Cost Sheet and Statement of Cost.

Total cost Rs. Direct materials Direct labour Direct expenses Cost per unit Rs.

COST
Add : works overhead

PRIME

COST
Add : administration overhead

WORKS

PRODUCTION

COST OF

Add : selling and distribution overheads

DIVISIONS OF COST :
PRIME COST WORKS COST COST OF PRODUCTION COST OF GOODS SOLD TOTAL COST OR COST SALES

PRIME COST = Direct Material + Direct Wages + Direct Expenses

COST OF RAW MATERIAL CONSUMED = Material Purchased + Opening Stock of Raw Materials - Closing Stock of

FACTORY COST = Prime Cost + Factory Overheads.

FACTORY COST = Prime Cost + Factory Overheads + Opening Stock of Work-in-Progress Closing Stock of Work-in-Progress

COST OF PRODUCTION = Factory Cost + Office and Administration Expenses.

COST OF GOODS SOLD = Cost of Production + Opening Stock of Finished Goods Closing Stock of Finished Goods.

TOTAL COST = Cost of Goods Sold + Selling and Distribution Expenses

ILLUSTRATION

The following costing information relates to commodity Afor the half year ending 31st dec 2009 RS. RS. Purchase of raw materials 1,20,000 Stock(31st dec 2009) Works overheads 48,000 Raw materials 22,240 Direct wages 1,00,000 Finished products 32,000 Carriage on purchases 1,440 (2000 TONS) WIP(1ST JULY,2009) 4,800 Stock(1st july 2009) WIP(31ST DEC,2009) 16,000 Raw materials 20,000 Sales 3,00,000 Finished products 16,000 (1,000 TONS) Selling and Distribution overheads are RE.1 per unit sold.16,000 tons of commodity were produced during the period.