Swayam Siddhi College of Mgt & Research

SSCMR Presentor : Prof. Rahul Shah

Cost Sheet
Swayam Siddhi College of Mgt & Research
SSCMR Presentor : Prof. Rahul Shah

Introduction
• Cost sheet is defined as “a document which
provides for the assembly of the detailed cost of
a cost centre or cost unit.”
• Thus cost sheet is a periodical statement of cost
designed to show in detail the various elements
of cost of goods produced like prime cost, factory
cost ,cost of production and total cost.
• It is prepared on regular intervals e. g. weekly,
monthly , quarterly , yearly ,etc.
Swayam Siddhi College of Mgt & Research
SSCMR Presentor : Prof. Rahul Shah

PURPOSE OF COST SHEET

• It reveals the total cost and cost per unit of
goods produced.
• It discloses the break – up of total cost
into different elements of cost.
• It provides a comparative study of the cost of
current period with that of the corresponding
previous period.
• It controls cost.
• It acts as a guide to management in fixation
of selling price & quotation of tenders.
Swayam Siddhi College of Mgt & Research
SSCMR Presentor : Prof. Rahul Shah
IMPORTANCE OF COST SHEET
• Cost ascertainment-The main objective of the cost sheet is
to ascertain the cost of a product.
• Cost sheet helps in ascertainment of cost for the purpose of
determining cost after they are incurred. It also helps to
ascertain the actual cost or estimated cost of a Job.
• Fixation of selling price-To fix the selling price of a product or
service, it is essential to prepare the cost sheet. It helps in fixing
selling price of a product or service by providing detailed
information of the cost.
• Help in cost control-For controlling the cost of a product it is
necessary for every manufacturing unit to prepare a cost sheet.
• Facilitates managerial decisions-It helps in taking important
decisions by the management such as: whether to produce or buy
a component, what prices of goods are to be quoted in the tender,
whether to retain or replace an existing machine etc.
Swayam Siddhi College of Mgt & Research
SSCMR Presentor : Prof. Rahul Shah
Elements of cost

Materials Labour Expenses

Direct Indirect Direct Indirect Direct Indirect

Overheads

Production or works Administration Selling & Distribution

overheads overheads overheads
Swayam Siddhi College of Mgt & Research
SSCMR Presentor : Prof. Rahul Shah
 Swayam Siddhi College of Mgt & Research
SSCMR Presentor : Prof. Rahul Shah
(Output …..) Cost Sheet(for ……….)
Cost Per
Total Cost
Particulars Rs.
Unit
Rs.
Direct Material
Direct Labour
Direct Expenses ----------------- ……….........
(a) Prime Cost -- ....
Factory Overheads …………………...………………
(b)Works Cost …
Office Overheads …
……………………. ………………
(c)Cost of Production …
…
Selling and Distribution Expenses
................. ………………….

(d)Total Cost
Swayam Siddhi College of Mgt & Research
SSCMR Presentor : Prof. Rahul Shah
List of Factory Overheads
Indirect Material
Indirect Labour/Unproductive Labour/Wages Rent,Rates,Tax and
Insurance of Factory Lighting,Power and Fuel of Factory
Loose Tools
Salary of Factory Manager Remunaration of Technical
Director
Repairs and Depreciation of Factory Building Depreciation,Insurance and Repairs
of Factory Machines Stores Expenses
Pay of Holidays
Factory Stationery and Telephone Expenses Drawing Office
Expenses
Haulage
Laboratory and Research Expenses
Removal of Overburdens
Cost of Rectification of Defective Work
Labour Welfare Expenses
Cost of Idle Time
Supervision , Inspection and Testing Expenses
Expenses of Quality Control
Swayam Siddhi College of Mgt & Research
SSCMR Presentor : Prof. Rahul Shah

List of Office and Administration Expenses

Rent,Rates and Taxes of Office Building Office

Lighting and Cleaning
Salary of Office Staff
Repairs and Depreciation of Office Furniture Insurance,
Repairs and Depreciation of Office Building Printing and
Stationery
Postage, Telegram,Telephone,Fax,Internet Expenses
Director’sFees
Audit Fees
Legal and Bank Expenses
Counting Office Salaries
Establishment Expenses General
Expenses
Swayam Siddhi College of Mgt & Research
SSCMR Presentor : Prof. Rahul Shah

List of Selling and Distribution Expenses

Expense of Sales Office
Salary and Commission to Sales Manager etc.
Travelling Expenses
Advertisement
Show Room Expenses
Price List
Samples and Gifts
Carriage Outwards
Royalty on Sales
Warehouse Expenses
Depreciation and Maintenance of Delivery
Vans
Market Research Expenses
After-Sales service cost
Warranty Claims
Sales Incentives
Petty Expenses for the Welcome of Customers