Accounting: Material and Stores: Cost Sheet Preparation and Components of Cost Sheet

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In order to prepare Cost Sheet, we need not follow a standard format. Because, Cost Sheet format may change from industry to industry. For basic understanding a specimen of cost sheet is given below.

Cost Sheet Preparation

Cost Sheet Preparation

Image of Cost Sheet Preparation

Image of Cost Sheet Preparation

Example:

From the following information, prepare a cost sheet for period ended on 31st March 2006.

Opening stock of raw material Rs.12,500

Purchases of raw material Rs.1,36,000

Closing stock of raw material Rs.8,500

Direct wages Rs.54,000

Direct expenses Rs.12,000

Factory overheads 100% of direct wages

Office and administrative overheads 20% of works cost

Selling and distribution overheads Rs.26,000

Cost of opening stock of finished goods Rs.12,000

Cost of Closing stock of finished goods Rs.15,000

Profit on cost 20%

Solution:

Cost Sheet

Table of Cost Sheet
Table of Cost Sheet

Details

Amount (Rs.)

Direct Material: Material consumed 12500

Opening stock of raw material 136000

Add: Purchases 148500

Less: Closing Stock of raw material 8500

Direct Wages

Direct Expenses

Prime Cost

Factory Overheads: 100% of Direct Wages

Works Cost

Office and Administrative Overheads

20% of works cost

Total cost of production

Add: Opening stock of finished goods

Cost of goods available for sale

Less: Closing stock of finished goods

Cost of goods sold

Selling and Distribution heads

Total Cost or Cost of Sales

Profit (20% on Cost i.e. 3,35,000*20/100)

Sales

140000

54000

12000

206000

54000

260000

52000

312000

12000

324000

15000

309000

26000

335000

67000

402000

Components of Cost Sheet

Costs

Costs

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