all aspects discussed are presented in the format or specimen of a cost sheet which 616337
Analysis of the Components of Total Cost
An analysis of the total cost of production and cost of sales is carried out by preparing “Cost sheet”. A Cost sheet is an important document prepared by the costing department. Cost sheet is prepared to analyse the components of total cost, thereby determining (i) prime cost, (ii) works cost, (iii) cost of production, (iv) cost of sales and (v) profit. All aspects discussed are presented in the format or specimen of a cost sheet which is shown inTable 1.6:
Specimen of Cost Sheet
COST SHEET
For the period ended….
|
Particulars |
Amount (Rs.) |
|
1. Direct Material |
– |
|
2. Direct Labour |
– |
|
*13. Direct Expenses |
– |
|
4. PRIME COST (Add 1 + 2 + 3) |
×× |
|
5. Add: Factory overhead |
– |
|
6. WORKS COST (or) FACTORY COST {Add 4 + 5} |
×× |
|
*27. Add: Administration overhead |
– |
|
8. COST OF PRODUCTION (6 + 7) |
×× |
|
9. Add: Selling and distribution overhead |
– |
|
10. TOTAL COST (or) COST OF SALES |
×× |
|
11. PROFIT |
– |
|
12. SALES |
×× |
Cost Sheet Depicting Components of Total Cost
The following inventory data relate to XL Ltd:
|
Inventories |
||
|
Beginning (Rs.) |
Ending (Rs.) |
|
|
Raw materials |
72,000 |
80,000 |
|
Work-in-progress |
75,000 |
90,000 |
|
Finished goods |
1,20,000 |
1,00,000 |
|
Additional Information |
(Rs.) |
|
|
Cost of goods available for sale |
7,15,000 |
|
|
Total goods processed during the period |
6,75,000 |
|
|
Factory overheads |
1,21,000 |
|
|
Direct materials used |
1,64,000 |
|
You are required to determine:
- Raw material purchased
- Direct labour cost incurred
- Cost of Goods sold.