Cost Sheet

Cost Accounting
It is concerned with recording, classifying and summarizing costs for determination of costs of products and services; planning, controlling and reducing such costs and furnishing of information to management for decision making.

Cost Accountancy

Cost Accounting

Costing

Cost Control

Cost Reduction

Cost Audit

Concept of Cost
The amount of resources given up in exchange for some goods or services. The resources so given up are always expressed in terms of money.

Elements of Cost
Direct Material Direct Labour Direct Expenses Overheads

Factory Overheads

Office & Administration Overheads

Selling & Distribution Overheads

Indirect Indirect Indirect Indirect Material Labour Expense Material

Indirect Indirect Indirect Indirect Indirect Labour Expense Material Labour Expense

Components of Cost
Prime Cost = Direct Material + Direct Labour + Direct Expenses Factory Cost = Prime Cost + Factory Overheads

Office Cost = Factory Cost + Factory Overheads

Cost of Sales or Total Cost = Cost of Production of Goods Sold + Selling & Distribution Overheads

Items to be Excluded from Cost Sheet

Appropriation of Profits
Appropriation to sinking funds Dividends paid Taxes on incomes & profits Transfers to general reserves Excess provision for depreciation of buildings, plant etc. and for bad debts Amount written off goodwill, preliminary expenses, underwriting commission, discount on debentures issued; expenses of capital issue etc. Capital expenditure specifically charged to revenue Charitable Donations

 Purely financial charges

Losses on sale of investments, buildings, etc. Expenses on transfer of companys office. Interest on Bank Loan, debentures, mortgages, etc. Damages payable Penalties and fines Losses due to scrapping of machinery Remuneration paid to the proprietor in excess of a fair reward for services rendered.
Interest received on Bank deposits Profits made on the sale of investments, fixed assets etc. Transfer fees received Rent Receivable

Purely financial incomes

Rent Receivable Interest , dividends etc., received on investments Brokerage received Discount, commission received

Abnormal Gains & Losses

Losses or gains on sale of fixed assets Loss to business property on account of theft, fire or other natural calamities.