gS eo fees rts ovate mines ona eoegooincm baad sat fs ‘Now all these terms will be discussed in detail one by one. | LDirect Materials are those materials which can be identified in the product and can be y ‘ansiently measured and directly charged to the product. Thus, these materials directly enter ‘iepnduction and form a part of the finished product. For example, timber in furniture making, of thindress making and bricks in building a house. Following are normally classified as direst ‘il (9A raw materiats like jute in the manufacture of gunny begs, pero in funy, and _, tuits in canning industry. terials specifically purchased for a specific job, process or order like glue for book: , starch powder for dressing yarn ete. snente purchased or produced like batteries for cars and tyres forvera seein sss diet mer eg va a ae and na ey }, in some cas oer pen ie feat can amas ee a reba gn = making. This is because their value is in po cua iin i - : compet ce ch iy with which a material eq, afin ca to be treated a dae sm ean en ge constastiom Compe ‘traced. :position jn altering {°¢, "that labour which canes + tour exoente ne word goo oxen simple jact OF oF expended, spre product own as direct wage ‘process. in aiding Gi Labour engaeed i it eet ain ot ec for such POUNCE, it) set anatase Ste, though not direct labour, can be treated pad wo wupervisoe ron epocific ou process and the Hours the) speak fs eae cate na uct oF Br yhere the cost 18 not Sinica, ies fairly meno? much of abour though directly spent on a product, i na, about ae peers ie 5 Chargeable) EEPODSGE, 2 es which can be identified to a particy ‘roated mane All vere kngum as direct expenses 0 thet vos ce iy charged the cette Sour) incurred specifically for a perl, ne nae nevis ic7paties, Those are directly charked to the prot Se Seng ist ePenay bgt om production xi dy, kn ees nay ee 1 and ‘equipment, packing expenses to make the product iedaane charges of «specie IAD and Pec ialy for a particular job, cost of making wo oa for-a job, cost of making, travelling expen EXAMPLE : Compute total direct expenses siving appropriate explanatory notes; :concen to the finished goods ‘fixed assets like plant and machinery, works, Tike stores, finished goods ete; repairs ‘and other fuel charges; rent, rates and Y ah Al stationery, postage, telegrams and telephone chars jon clubs ; medical set ‘ “These also include wages of indirect workers, i ‘and other factory supplies, salaries ‘production control and progress department. ition Overheads. These refer to cost Land administration of an organisation. av a directing the organisation, control ing which is not related dis These ‘jeretarial, accounting and financial contro) of an un« Scnning the general office e.g. office rent, light, heat, ‘and maintenance taxes on works, s rectly to a rescarch, development, ‘include all expenses incurred in the direction, and and properties, ‘services like canteen, tere like dispensary and hospital and service department jndireet materials such as lubricants, “and other costs related to tool room, design and 1, of all activities relating to general d "Those are the indirect expenses incurr ed in. ing and managing the operations of an ‘production or selling activity ¢ ‘salaries and wages of clerks, credit approval, eash collection and treasure ‘executives r jegal and accounting machine services + fixed charges. ‘Selling Overheads. e orders and compris price lists, ME cade, These are the expenses incurred in handling a product from inti] it reaches the ultimate consumer. ‘department, general investigations and . These are the expenses incurred of seeking to eres "These are the expenses ilable for despatch and le for reuse. Distribution ;pleted in the works until arehouse staff ewwsng price represents Profi or log, cost of production, total cost ang Pro, the undermentioned AEUe® Labour € 2.500 5 Direct Expenses € 1,000; Facto thy 000 ; Dire SP hing E b€ 700 and Sales® 15,000, "YX, yea Labour + orect ExPense® ret ati 0002 © Bon 1,500 = 10, cos a om mr Sg 2 1,000 00 wots Cot = eho a Ears naa Sor goneee = 108006 7 =e emencte ee fee 8g tre CEASNPLE, A cnpany masala retails toting, You re roquired t ane ited now and numbers Y and rot the following classifications (Each costs hic tn nt ne cassis tOD)- oa (q) Direet Materials (e) Selling & Distribution Costs (@) Direct Labour {f Research & Development Costs Oe pated (g) Finance Costs (@ Inet Production Een Coats. costs. ee paonne onal ps lored calle 2) Wee of s0ct 9, BUST 7 Tact Pareel so ratte ages of operators in cutting department, (5) Developing a eee 1 ator it track drivers who handle raw materials, (7) Wane ieee snes) et ountants salary, (@) Cost of painting advertising slogans pee SSR airs hw Cte aren, ee Patiahbbricants oe seving mace irs dior general tice computer 20) Maintenance contract for a ‘nachiney (5) Interest on bank overdraft Re Fo ing Sec gortarae mirergin rey ges oe ; al, 8 3 jumber of units of ; sericea ee eg canes fr delivery vehicles, (20) Amount payable tte r (2) Direct Materials pe (0) Direct Labour (@) Selling & Distribution Co: Numbers (6) Direct Expenses (Research & sts 3, 9, 11, 16,19 (2 niet Prosucton Costs @ Development Costs 5 15elites of profits # and matters of pure finance ? ies wc arena ined toa leans on Om a Pato eet. Folewing "(o) Purely Financial Charges. (i) Loss gz ts, (i) Discount on shares and debentures s, (v) Expenses of the company’s aoa tes we sh ne aoe Za nach oun Satan Teague i banat pas oe in sxoere of a fir ror jerviees rendered, (x) Interest on capital, (ci) Expenses of |Appropriations, , ‘of Profit. (i) Donations and Charities, paid, (iv) Transfers to reserves and sinkit Ona a _ ‘and sinking funds, (0) Additional provision ee feed caects Gad for pad aches ot) Gatial expoudinre specially erg to “Writing off Intangible and Fictitious Assets. Goodwill, Patents and Copyrights, Preliminary Expenses, Organisation Expenses, Underwriting Commission, et or Statement of Cost et is a statement designed to show the output of a particular accounting period along- ip of costs. The data incorporated in cost sheet are collected from various statements of thhave been written in cost accounts, either day-to-day or regular records. ‘Exod form for preparation ofa cost sheet but in order to make the cst sheet mors presented in columnar form. ‘The columns are for the total cost of the current the current period, total cost and per ‘unit cost for a preceding period and total ‘and so on. The information to be incorporated in a cost for the purpose of control. ‘of double entry cost