Accounting: Material and Stores: Cost Sheet Preparation and Components of Cost Sheet (For CBSE, ICSE, IAS, NET, NRA 2022)

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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

Example:

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

Opening stock of raw material ₹ 12,500

Purchases of raw material ₹ 1,36, 000

Closing stock of raw material ₹ 8,500

Direct wages ₹ 54,000

Direct expenses ₹ 12,000

Factory overheads 100 % of direct wages

Office and administrative overheads 20 % of works cost

Selling and distribution overheads ₹ 26,000

Cost of opening stock of finished goods ₹ 12,000

Cost of Closing stock of finished goods ₹ 15,000

Profit on cost 20 %

Solution:

Cost Sheet

Table of Cost Sheet
DetailsAmount (₹)
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

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