Presentation on Cost Sheet
Team members
Name Roll No
1. Muhammed Ibrahim.C 21
2.Pooja.S.Shah 39
3.Ali Asgar 2
4.Vineet 47
5.Aabid 10
COST
•The amount of expenditure ( actual or notional)
incurred on, or attributable to, a given thing.
•The value of Economic Resources used
COST ACCOUNTING
Cost accounting is concerned with
• Recording,
• Classifying and
• Summarizing costs
For
1.Determination of costs of products or services,
2. Planning, controlling and reducing such costs
3. Furnishing of information to management for
decision making
ELEMENTS COST
OF
COST
OTHER EXPENSES
MATERIALS LABOUR
DIRECT INDIRECT
DIRECT INDIRECT INDIRECT
DIRECT
OVERHEADS
SOH DOH
FOH AOH
MATERIAL:
The substance from which the finished
product is made is known as material.
Direct material is one which can be directly
or easily identified in the product Eg: Timber
in furniture, Cloth in dress, etc.
Indirect material is one which is required to
make the product but not going inside the
finished good.
Examples of Indirect material
At factory level – lubricants, oil,
consumables, etc.
At office level – Printing & stationery,
Brooms, Dusters, etc.
At selling & dist. level – Packing materials,
printing & stationery, etc.
LABOUR:
The human effort required to convert the materials
into finished product is called labour.
DIRECT LABOUR is one which can be
conveniently identified or attributed wholly to a
particular job, product or process.
Eg:wages paid to carpenter, fees paid to tailor,etc.
INDIRECT LABOUR is one which cannot be
conveniently identified or attributed wholly to a
particular job, product or process.
Examples of Indirect labour
At factory level – foremen’s salary, works
manager’s salary, gate keeper’s salary,etc
At office level – Accountant’s salary, GM’s
salary, Manager’s salary, etc.
At selling and dist.level – salesmen salaries,
Logistics manager salary, etc.
OTHER EXPENSES
are those expenses other than materials and labour.
DIRECT EXPENSES are those expenses which can be
directly allocated to particular job, process or
product. Eg : Excise duty, royalty, special hire
charges,etc.
INDIRECT EXPENSES are those expenses which
cannot be directly allocated to particular job,
process or product.
Examples of other expenses
At factory level – factory rent, factory
insurance, lighting, etc.
At office level – office rent, office
insurance, office lighting, etc.
At sales & distribution level – advertising,
show room expenses like rent, insurance,
etc.
COST SHEET
DIRECT MATERIAL
DIRECT LABOUR
DIRECT EXPENSES
PRIME COST
FACTORY OVERHEADS
FACTORY COST
OFFICE OVERHEADS
COST OF PRODUCTION
SELL & DIST OVERHEADS
COST OF SALES
PROFIT
SALES
COST SHEET - ADVANCED
OPENING STOCK OF RAW MATERIALS
+PURCHASES
+CARRIAGE INWARDS
-CLOSING STOCK OF RAW MATERIALS
VALUE OF MATERIALS CONSUMED
+DIRECT WAGES
+DIRECT EXPENSES
PRIME COST
+FACTORY OVERHEADS
+OPENING STOCK OF WIP
-CLOSING STOCK OF WIP
FACTORY COST
(CONT.)
FACTORY COST
+ADMINISTRATIVE OVERHEADS
COST OF PRODUCTION
+OPENING STOCK OF FINISHED GOODS
-CLOSING STOCK OF FINISHED GOODS
COST OF GOODS SOLD
+SELL. & DIST. OVERHEADS
COST OF SALES
+PROFIT
SALES
Methods of costing
1. Job costing Eg: printing
2. Contract costing Eg: Construction of roads
3. Batch costing Eg: Bakery
4. Unit costing Eg: Brick making
5. Process costing Eg: Paint
6. Operating costing Eg: Bus service
7. Multiple costing Eg: car Manufacturing
Benefits of cost sheet
Guide for pricing decisions
Base for cost control
Ease in calculation of per piece cost
Deals with monetary as well as non-monetary
Provide valuable information about plants &
machinery
THANK YOU
