Chapter 3
Cost Sheet
Cost sheet is a statement prepared to present the detailed costs of total production/output
during a period. It provides information relating to cost at different stages production. The
preparation of cost sheet is one of the important and primary functions of cost
accounting. Cost sheet is not an account. There is a prescribed form for preparation of cost
sheet.
COST SHEET – FORMAT
Particulars Amoun Amount
t
Opening Stock of Raw Material ***
Add: Purchase of Raw materials ***
Add: Purchase Expenses/Carriage Inward ***
Less: Closing stock of Raw Materials ***
Less: Purchase Return/Material Return ***
Raw Materials Consumed ***
Direct Wages (Labor) ***
Direct Charges/Expenses ***
Prime cost (1) ***
Add :- Factory Over Heads:
Factory Rent, Rates, Insurance ***
Factory Power ***
Indirect Material ***
Indirect Wages ***
Factory Supervisor Salary ***
Drawing Office Salary ***
Factory Insurance ***
Factory Asset Depreciation ***
Work Cost /Factory Cost ***
Add: Opening Stock of WIP ***
Less: Closing Stock of WIP ***
Work Cost /Factory Cost (2) ***
Add:- Office & Administration Over Heads:-
Office Rent ***
Office Asset Depreciation ***
General Charges ***
Audit Fees ***
Bank Charges ***
Counting house Salary ***
Other Office Expenses ***
Cost of Production (3) ***
Add: Opening stock of Finished Goods ***
Less: Closing stock of Finished Goods ***
Cost of Goods Sold ***
Add:- Selling and Distribution OH:-
Sales man Commission ***
Sales man salary ***
Traveling Expenses ***
Advertisement ***
Delivery man expenses ***
Sales Tax ***
Bad Debts ***
Cost of Sales (5) ***
Profit (balancing figure) ***
Sales ***
Problem 1
Bombay Manufacturing Company submits the following information on 31-3-2010:
Particulars Tk
Sales for the year 2,75,000
Inventories at the beginning
of the year-
Raw Materials 3,000
Work in Progress 4,000
Finished Goods 1,10,000
Purchase of materials 65,000
Direct Labor 6,000
Inventories at the end of the
year -
Raw Materials 4000
Work in Progress 6000
Finished Goods 8000
Other expenses for the year –
Selling Overhead 27,500
Administrative 13,000
overhead
Factory overheads 40,000
Carriage Inward 200
Material Return 100
Solution 1
Bombay Manufacturing Company
Cost Sheet
31.3.2010
Particulars Amount (Tk) Amount (Tk)
Opening Inventory/Stock of Raw Material 3,000
Add: Purchase of Materials 65,000
Add: Carriage Inward 200
68,200
Less: Closing Inventory of Raw Material (4,000)
Less: Material Return (100)
Direct Material Consumed/Used 64,100
Direct Labor 6,000
Prime Cost 70,100
Add: Factory Overheads/Work
40,000
Overheads/Manufacturing Overheads
1,10,100
Add: Opening Inventory of W.I.P 4,000
1,14,100
Less: Closing Inventory of W.I.P 6,000
Factory Cost/Work Cost 1,08,100
Add: Office & Administrative Overheads 13,000
Cost of Production 1,21,100
Add: Opening Inventory of Finished Goods 1,10,000
Cost of goods available for sale 2,31,100
Less: Closing Inventory of Finished Goods 8,000
Cost of Goods Sold 2,23,100
Add: Selling and Distribution Overheads 27,500
Cost of Sales 2,50,600
Profit (2,75,000 – 2,50,600) 24,400
Sales 2,75,000
Problem 2:
The Managing Director’s remuneration is to be allocated as Rs. 4,000 to the factory, Rs. 2,000 to
the office and Rs. 6,000 to the selling departments. From the above information prepare a cost
sheet.
Solution 2
Moonshine Industries
Cost Sheet
For the year 2002
Particulars Amount (Rs.) Amount (Rs.)
Opening stock of raw material 25,000
Add: Purchase of Raw Material 85,000
1,10,000
Add: Carriage Inward 5,000
1,15,000
Less: Closing stock of raw material 40,000
Direct Material consumed 75,000
Direct Wages 75,000
Other Direct Charges 15,000
Prime Cost 1,65,000
Add: Factory Overhead
Indirect Wages 10,000
Rent and rates (factory) 5,000
Indirect Material 500
Depreciation of Plant 1,500
Other factory expenses 5,700
Managing Director’s Remuneration 4,000
26,700
Work Cost/ Factory Cost 1,91,700
Add: Office & Administrative Overhead
Rent and rates (office) 500
Depreciation of office furniture 100
Office Salary 2,500
Other office expenses 900
Managing Director’s Remuneration 2,000
6,000
Cost of Production 1,97,700
Add: Selling and distribution overhead
Salesman Salary 2,000
Managing Director’s Remuneration 6,000
Other selling expenses 1,000
travelling expenses of salesman 1,100
Carriage outward 1,000
Advertisement 2,000
13,100
Cost of sales 2,10,800
Profit (2,50,000-2,10,800) 39,200
Sales 2,50,000
From the above Information Prepare a Cost Sheet.
