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A cost sheet can be a way of being aware of all the costs incurred by us on different things while running
a factory or facility. From the knowledge of costs, we can think of cost cutting ideas for companies and also
cost cutting ideas for institutions, easily. So, you must have some idea as to why do we prepare a cost
sheet now. The job cost sheet format is standard and we are expected to follow it. In the next few
paragraphs, let us understand how to prepare cost sheets.
Materials Consumed = (Opening stock of raw materials + purchase of raw material + carriage inward) -
(closing stock of raw material).
Once this cost of production is calculated, you need to add the opening stock of finished goods and then
subtract the closing stock of finished goods before we calculate the cost of sales.
This explanation on how to prepare cost sheet gave us knowledge of all items of cost sheets and how
they are used to calculate the total cost. Only monetary aspects are considered in the preparation of cost
sheets. Once the cost sheet is prepared, you can also think of some cost control strategies for your firm. So
try preparing the same yourself and test your accounting knowledge and skills. Good luck!