Preparation of Cost Sheet - Overheads, Cost Management B Com Notes | EduRev

Cost Management

B Com : Preparation of Cost Sheet - Overheads, Cost Management B Com Notes | EduRev

The document Preparation of Cost Sheet - Overheads, Cost Management B Com Notes | EduRev is a part of the B Com Course Cost Management.
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Cost Sheet

Cost sheet is a document that provides for the assembly of an estimated detailed cost in respect of cost centers and cost units. It analyzes and classifies in a tabular form the expenses on different items for a particular period. Additional columns may also be provided to show the cost of a particular unit pertaining to each item of expenditure and the total per unit cost.

Cost sheet may be prepared on the basis of actual data (historical cost sheet) or on the basis of estimated data (estimated cost sheet), depending on the technique employed and the purpose to be achieved.

The techniques of preparing a cost sheet can be understood with the help of the following examples.

Example 1

Following information has been obtained from the records of left center corporation for the period from June 1 to June 30, 1998.

 

Cost of raw materials on June 1,1998

30,000

Purchase of raw materials during the month

4,50,000

Wages paid

2,30,000

Factory overheads

92,000

Cost of work in progress on June 1, 1998

12,000

Cost of raw materials on June 30, 1998

15,000

Cost of stock of finished goods on June 1, 1998

60,000

Cost of stock of finished goods on June 30, 1998

55,000

Selling and distribution overheads

20,000

Sales

9,00,000

Administration overheads

30,000

Prepare a statement of cost.

Solution

Statement of cost of production of goods manufactured for the period ending on June 30, 1998.

 Preparation of Cost Sheet - Overheads, Cost Management B Com Notes | EduRev
 Preparation of Cost Sheet - Overheads, Cost Management B Com Notes | EduRev
 Preparation of Cost Sheet - Overheads, Cost Management B Com Notes | EduRev

 Example 2

From the following information, prepare a cost sheet showing the total cost per ton for the period ended on December 31, 1998.

Raw materials  33,000 Rent and taxes (office)  500
Productive wages  35,000 Water supply 1,200
Direct expenses  3,000 Factory insurance  1,100
Unproductive wages  10,500 Office insurance  500
Factory rent and taxes  2,200 Legal expenses  400
Factory lighting  1,500 Rent of warehouse  300
Factory heating  4,400 Depreciation-- --
Motive power Haulage 3,000 Plant and machinery  2,000
Director’s fees (works)  1,000 Office building  1,000
Directors fees (office)  2,000 Delivery vans 200
Factory cleaning  500 Bad debt 100
Sundry office expenses  200 Advertising 300
Expenses 800 Sales department salaries  1,500
Factory stationery  750 Up keeping of delivery vans  700
Office stationery  900 Bank charges 50
Loose tools written off 600 Commission on sales 1,500

The total output for the period has been 10000 tons.

Solution : Cost sheet for the period ended on December 31, 1998

Raw materials 33,000 71,000
Production wages 35,000
Direct expenses 3,000
Prime cost ----
Add--works overheads: 10,500
Unproductive wages 7,500
Factory rent and taxes 2,200
Factory lighting 1,500
Factory heating 4,400

 

Motive power
Haulage
Directors’ fees (works)
Factory cleaning
Estimating expenses
Factory stationery
Loses tools written off
Water supply
Factory insurance
Depreciation of plant and machinery

Works cost
Add-- office overhead
Directors’ fees (office)
Sundry office expenses
Office stationery
Rent and taxes (office)
Office insurance
Legal expenses
Depreciation of office building
Bank charges

Office cost
Add-- selling and distribution overheads
Rent of warehouse
Depreciation on delivery vans
Bad debts
Advertising
Sales department salaries
Commission on sales
Upkeep of delivery vans
Total cost
Cost per ton $. 1,18,200/10,000 = $. 11.82

3,000
1,000
500
800
750
600
1,200
1,100
2,000


2,000
200
900
500
500
400
1,000
50


300
200
100
300
1,500
1,500
700


37,050


1,08,050

5,550


1,13,600

4,600


1,18,200

 

 

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