Cost Sheet/Unit Costing

Meaning & Definition of Cost Sheet

Cost Sheet is defined as a document which provides for the assembly of the estimated detailed cost in
respect of a cost center or cost unit.

Thus, a Cost Sheet is a statement usually prepared to present the analytical cost of total production
during a particular period.

Format of Cost Sheet

1. Simple Cost Sheet

In the books of Company A

Cost sheet for the period ended ____
Name of the Product- _________ Units Produced-_________________ Units Sold-___________
Particulars Total cost (Rs.) Unit cost (Rs.)
Direct Materials
Add: Direct Labour
Add: Direct expenses
Prime Cost (1)

Add: Factory Overheads

Factory Cost/Works Cost (2)

Add: Office Overheads

Cost of Production/Office Cost (3)

Add: Selling & Distribution Overheads

Total Cost/Cost of Sales (4)

Add: Profit or Less: Loss

Sales

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2. Cost Sheet with Stock Adjustments
In the books of Company A
Cost sheet for the period ended ____
Name of the Product- _________ Units Produced-_______________ Units Sold-___________
Particulars Total cost (Rs.) Unit cost (Rs.)
Opening stock of Raw Materials
Add: Purchases of Raw Materials
Add: Expenses on purchases of Raw Materials
Less: Closing stock of Raw Materials
Less: Purchase returns
Less: Sale of scrap or defectives of raw materials
Cost of Materials Consumed (1)
Add: Direct Labour
Add: Direct expenses
Prime Cost (2)

Add: Factory Overheads

Add: Opening stock of Work-in-Progress
Less: Closing stock of Work-in-Progress
Less: Sale of scrap or defectives of Work-in-Progress
Factory Cost/Works Cost (3)

Add: Office Overheads

Cost of Production/Office Cost (4)

Add: Opening Stock of Finished Goods

Less: Closing Stock of Finished Goods
Cost of Goods Sold (5)

Add: Selling & Distribution Overheads

Total Cost/Cost of Sales (6)

Add: Profit or Less: Loss

Sales (7)

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Sums:
1. Accounting for Business Decisions, Nirali Prakashan, Pg. 3.30
Sum of Mumbai Traders
In the books of Mumbai Traders, Mumbai
Cost Sheet for the year ending 31st March, 2013
Particulars Amount (Rs.) Amount (Rs.)
Cost of Direct Materials 2,00,000
Add: Direct Wages 1,00,000
Add: Direct expenses
1. Cost of special patterns 40,000
2. Other direct expenses 2,000
3. Royalty 8,000

Prime Cost (1) 3,50,000 3,50,000

Add: Factory expenses

1. Factory Rent & Insurance 5,000
2. Factory Indirect Wages 3,000
3. Factory Indirect Material 1,000
4. General Works overheads 2,000

Factory Cost (2) 3,61,000 3,61,000

Add: Office Expenses

1. Office Indirect Materials 5,000
2. Post & Telegram 2,000
3. Printing & Stationery 500

Cost of Production (3) 3,68,500 3,68,500

Add: Selling & Distribution Expenses

1. Carriage Outward 2,500
2. Selling cost 4,000
3. Travelling salesman’s salary 4,000
4. Bad debts written off 1,000

Total Cost (4) 3,80,000 3,80,000

Add: Profit for the year (5) 20,000 20,000

Sales 4,00,000 4,00,000

Percentage of profit earned to sales= Profit * 100

Sales

3
 = 20,000* 100
4,00,000
= 5% on sales

2. FAM by B.S. Shah Prakashan, Pg. 123

Solution:
Cost Sheet for the month of March, 2016
Particulars Amount (Rs.) Amount (Rs.)
Raw Materials consumed
Opening stock of raw materials 50,800
Add: Purchases of raw materials 43,400
Add: Carriage inward 700
Less: Closing stock of raw materials (61,000)
Materials consumed 33,900
Add: Productive Wages 34,900
68,800
Opening stock of work-in-progress 15,600
Less: closing stock of work-in-progress (17,200)
Prime Cost 67,200

Add: Factory overheads

Indirect wages 1,200
Depreciation & maintenance of plant 3,300
Drawing office expenses 2,000
Works salaries 3,900
Stores expenses 700
Indirect materials 14,200 25,300

Factory or Works Cost 92,500

Add: Administration Overheads

1,200 1,200

Cost of Production 93,700

Add: Opening stock of finished goods 35,800

Less: Closing stock of finished goods (21,200)
Cost of Production of goods sold 1,08,300

Add: Selling & Distribution Overheads

Carriage Outward 2,000
Expenses of participating in
industrial exhibition 5,000 7,000

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 Total Cost 1,15,300
Note: Interest on debentures is a financial expense and goodwill written off is an
intangible asset written off, and therefore they will not be shown in the cost sheet.

3. FAM B.S.Shah Pg. 129 Sum. 6

In the books of Company
Cost sheet for the month of August, 2005
Units Produced and Sold- 5000 units
Particulars Total cost (Rs.) Unit cost (Rs.)
Direct Materials 6000kg. * Rs. 5 per kg. 30,000
Less: Sale of scrap of material (2,000)
28,000 5.60
Add: Direct Labour cost 5000 lab. Hrs* Rs. 4 per lab. hour 20,000 4.00
Add: Direct expenses 7,000 1.4
Prime Cost (1) 55,000 11.00

Add: Factory Overheads

Fixed 10,000 2.0
Variable (20000*50%) 10,000 2.0
20,000 4.0
Factory Cost/Works Cost (2) 75,000 15.0

Add: Office Overheads (33.33% of Factory Cost) 25,000 5.00

Cost of Production/Office Cost (3) 1,00,000 20.0

Add: Selling & Distribution Overheads (10% on cost of 10,000 2.0

production)
Total Cost/Cost of Sales (4) 1,10,000 22

Add: Profit 27,500 5.50

Sales 1,37,500 27.50

1. Labour hours= no. Of laborers* no. Of hours

50 labor hours
10 laborers*5 hours per laborer
5 laborers*10 hours per laborer
25 laborers*2 hours per laborer

2. Profit is 20% on S.P

If SP is Rs. 100, Profit will be Rs. 20, then CP will be Rs. 80.
Here, the cost price is Rs. 1,10,000, then profit will be ?

5
Profit CP
20 80
? 1,10,000
Therefore, 1,10,000*20 =Rs. 27,500
80

3. Universal Furniture Manufacturing Ltd. Sum. 7 Pg. 131, FAM, B.S. Shah

In the books of Universal Furniture Manufacturing Ltd.

Cost Sheet for the year ending 31st March, 2006
Production & Sales- 10,000 tables
Particulars Total cost Unit cost
(Rs.) (Rs.)
Raw materials consumed:
Opening stock of materials 12,000
Add:Purchases of raw material 1,70,000
Less: closing stock of materials (16,000)
Materials consumed 1,66,000
Add: wages 2,90,000
4,56,000
Add: Opening stock of Work-in-Progress 10,000
Less: closing stock of work-in-progress (6,000)
Prime Cost 4,60,000 46.00

Add: Factory overheads

Establishment ch. Of factory 36,000
Factory power 40,000
Light & fan of factory 6,000
Engg. Office exp. 20,000
Misc. Factory exp. 5,000
Rep. & depreciation of factory 35,000

Less: sale of factory scrap (2000) 1,40,000 14

Works Cost 6,00,000 60

Add: Office overheads

Establishment ch. Of office 1,04,000
Light& fan ch. Of office 6,000
Misc. Exp. Of office 6,000
Repairs & depreciation of office 4,000
1,20,000 12
Cost of production 7,20,000 72

Add: Selling & distribution overheads

Advertisement 40,000

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 Carriage outward 10,000
50,000 05
Cost of Sales/ Total Cost 7,70,000 77

Add: Profit 1,80,000 18

Sales 9,50,000 95

Note: 1. Interest on investment, profit on sale of machinery, provision for taxation are items
which do not appear in the cost sheet.
2.Since there is no opening and closing stock of finished goods, production=sales=10,000 units.

Sum no. 9 Pg. 135

Note1- Calculation of units of sales
Opening stock of finished goods (units)+production during the year (units) - sales during the year(
units)= closing stock (units)
Therefore, Opening stock of finished goods (units)+production during the year (units)-closing stock
(units)= sales during the year(units)
2000+4000-1000=5000 units is the units sold during the year.

Cost Sheet for the year ending ------

Units Produced- 4000 units and Units Sold- 5000 units
Particulars Cost (Rs.) Total cost Unit cost
(Rs.) (Rs.)
Raw materials consumed
Opening stock of raw material 20,000
Add: Purchases of raw material 1,00,000
Add: expenses relating to pur. of raw material 15,000
Less: closing stock of raw material (10,000)
Cost of Raw materials consumed 1,25,000 1,25,000 31.25

Add: Direct Labour cost 60,000 15

Add: Opening stock of work-in-progress 25,000

Less: closing stock of work-in-progress (10,000)
Prime Cost (1) 2,00,000 50

Add: Factory overheads

Fixed 10,000
Variable (8*4000 units) 32,000
42,000 10.5
Factory Cost/Works Cost (2) 2,42,000 60.5

Add: Office overheads 18,000

Cost of Production/Office Cost (3) 2,60,000 65

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 Add: Opening stock of finished goods 1,20,000
Less: closing stock of finished goods (65,000)
Cost of production of goods sold 3,15,000 63
(divide by
sales units)
Add: selling & distribution expenses (Rs.5 25,000 5
*5000 units)
Total Cost/Cost of Sales (4) 3,40,000 68

Add: Profit 60,000 12

Sales 4,00,000 80

Note: value of closing stock of finished goods

Units Cost(Rs.)
Prod. 4,000 2,60,000
Closing stock1,000 ?
2,60,000*1000 =Rs. 65,000
4,000

Sum. No. 4 Pg.126

1. Quantity of sales
Opening stock of finished goods(tons) +production(tons)-closing stock of finished goods (tons)= sales
(tons)
1000+16000-2000=15000 tons is the quantity of sales

Cost Sheet for the period from 1st July, 2005 to 31st December, 2005
Production- 16,000 tons Sales- 15,000 tons

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Particulars Cost (Rs.) Total cost Unit cost
(Rs.) (Rs.)
Raw materials consumed
Opening stock of raw material 20,000
Add: Purchases of raw material 1,20,000
Add: carriage inwards 1,440
Less: closing stock of raw material (22,240)
Cost of Raw materials consumed
1,19,200 7.45
Add: Direct Labour wages 1,00,000 6.25

Prime Cost (1) 2,19,200 13.70

Add: Works overheads 40,000 2.5

Add: Opening stock of work-in-progress 4,800

Less: Closing stock of work-in-progress (16,000)

Factory Cost/Works Cost (2) 2,48,000 15.5

Add: Office overheads 8,000 0.5

Cost of Production/Office Cost (3) 2,56,000 16
Add: Opening stock of finished goods 16,000
Less: closing stock of finished goods (32,000)
Cost of production of goods sold 2,40,000 16
(divide by
quantity sold)

Add: advertisement, discount allowed and 15,000 1

selling expenses (Re.1 *15000 tons)
Total Cost/Cost of Sales (4) 2,55,000 17

Add: Profit 45,000 3

Sales 3,00,000 20