M/s -________________________________________________ Cost sheet for the year ending

Quantity Manufactured: Quantity sold

Working column

Total cost

Cost per Unit

DIRECT COST
Direct Material
Opening stock of Raw Material (+) Purchase of Material (+) Carriage Inwards (-) Closing stock of Raw Material

** ** ** (-)** *** *** *** *** * * * *

Direct Wages Direct Expenses

PRIME COST

INDIRECT COST Factory Overheads

Power and Fuel Factory rent (-) sale of scrap

** ** ** (-)**

GROSS FACTORY COST

(+) Opening stock of Work in progress (-) Closing stock of Work in Progress FACTORY COST /WORK COST

*** *** (+) *** (-) *** ***

* * * * *

Office and administration ohs

Office salaries Printing and stationery COST OF PRODUCTION (+) Opening stock of finished goods (-) closing stock of finished goods

** **

Cost of goods sold Selling Overheads

Advertising Traveling Exps. Discount allowed

*** *** *** (-) *** ***

* *

** ** **

*** ***

* *

Distribution Overheads
Carriage outward

**

Packing charges Dep. on delivery van

** **

Total Cost/ Cost of sales Profit

SALES

*** *** *** ***

* * * *

Important Point 1) To find out the cost per unit from the raw material consumed till the cost of production divide all the amt by the Quantity manufactured and from the cost of production of goods sold till the sales divide all the amount by the quantity sold. For Opening and closing stock of finished Goods do not calculate per unit. 2) To find out either the Quantity Manufactured or the Quantity Sold Quantity Opening stock of Finished Goods (+) Quantity Manufactured (-) Closing stock of Finished goods Quantity Sold 3) *** *** (-) *** ***

Valuation of opening and closing stock of finished goods To find out the value of opening stock of finished goods always multiply opening stock quantity with the previous years cost of production per unit and to find out the value of closing stock of finished goods always multiply the closing stock quantity with the current year cost of production per unit. If previous years the cost of production of per unit is not given in the problem then assume it to be the same as current year cost of production per unit.

FIXED , VARIABLE AND SEMI VARIABLE COST 1. Variable cost- A variable cost is one which keeps on changing depending upon units. That is a variable cost increases if the units increases and decreases if the units decreases. This means that a variable cost totally depends on the units and does not depend upon the period. Eg. Raw Material cost, Wages of the workers. 2. Fixed cost- A fixed cost is one which always remains constant irrespective of any increase or decrease in the units. This means that even if the units

increase the fixed cost will remain as it is. This is because a fixed cost does not depends on the units but it always depends upon the period. Eg. Rent of the factory, salary of the managers etc. 3. Semi variable cost- A semi variable cost is partly variable and partly fixed. That is a semi variable cost is a combination of fixed cost and variable cost. In case of a semi variable cost one important point to be remembered that, the fixed portion is always remain constant where as the variable portion keeps on increasing or decreasing depending upon the increase or decrease in the units. Eg. Telephone bill. Etc.

Rules for Fixed cost /variable cost 1. In case of a variable cost, if there is any increase or decrease in the rate, the effect of such increase or decrease should be always given in the cost per unit column and not in the total cost column. In case of a fixed cost if there is any increase or decrease in the rate, the effect of such increase or decrease should be always given in the total cost column and not in the cost per unit column. 2. If the problem does not indicate which cost is variable and which cost is fixed, only in that case, the first three types of direct cost that is raw material , Direct wages and Direct Expenses can be considered as variable cost. And the next three types of Indirect cost that is factory ohs , office ohs and selling ohs can be considered as fixed cost.

Total cost ratio

A total cost ratio shows in what ratio the total cost should be divided. This ratio is useful when one consolidated amount is given and this amount is to be divided between 2 products or more than 2 products. The formula for a total cost ratio is as given below A B Cost per unit ratio * * * Units manufactured ratio * * Total cost ratio * *00 Any total cost can be divided only in total cost ratio and not any other ratio. In case of selling Ohs if a total cost ratio is to be found out we should always remembered to replace unit manufactured ratio by the units sold ratio in the formula.