Scribd
Upload
75 views19 pages

Unit-III Cost Sheet

The document discusses unit or output costing. It defines unit costing and the industries where it is commonly used like mines, mills etc. It explains the elements of cost, cost sheet, types of cost sheets and cost components appearing in a cost sheet like prime cost, factory cost, office cost and total cost.

Uploaded by

Golu Dhakad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
75 views19 pages

Unit-III Cost Sheet

The document discusses unit or output costing. It defines unit costing and the industries where it is commonly used like mines, mills etc. It explains the elements of cost, cost sheet, types of cost sheets and cost components appearing in a cost sheet like prime cost, factory cost, office cost and total cost.

Uploaded by

Golu Dhakad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 19

PRESTIGE INSTITUTE OF MANAGEMENT & RESEARCH

GWALIOR
UGC NAAC Accredited 'A' Grade Autonomous Institution

Cost Accounting

Unit-III

Dr. Gunjan Dwivedi


Assistant Professor Finance
Department of Management
Unit & Output Costing

 Herold J. Wheldon – “Single output or unit costing is a


method of costing by the units of production, where
manufacture is continuous and the units are identical or can
be made by means of ratios.”

 J. R. Batliboi – “Single or output cost system is used in


business where a standard product is turned out and it is
desired to find out the cost of a basic unit of production.”
Cont…
 From the analysis of the above definition it is clear that
generally this method is used in those industries, where
following characteristics are found:

 Production should be uniform or homogeneous and a continue affair,


 The units of production should be identical,
 The cost units should be physical and natural,
 Per unit cost has to be determined, for example per ton, per metre, per
pound, etc.

 Generally these characteristics are found in industries like


Coal Mines, Sugar Mills, Cloth Mills, Flour Mills, Cement
Factory, etc.
Elements of Cost under Output Costing
 In Output Costing in order to determine total cost and per unit
cost, it is necessary to collect all the elements of cost.

 The Cost related to unit costing are:

 Materials
 Labour
 Direct Expenses
 Overheads
Cost Sheet
 Cost Sheet is a Statement which is used to determine the
total cost of goods produced or units in a specific period and
in which total cost, per unit cost and the cost incurred at
various stages from manufacturing a product to the stage of
making it saleable are shown.

 In this way, it can be said that cost sheet is a statement in


which the cost of production is presented in an analytical
way.

 This statement can be prepared on weekly, monthly or


quarterly intervals as per the convenience.
Cont…
 ICMA London, “A document which provides for the
assembly of the detailed cost of a cost centre or cost unit.”

 Wheldon, “Cost Sheet are prepared for the use of


management and consequently they must include all the
essential details which will assist the manager in checking
the efficiency of production.”

 W.W. Bigg, “The expenditure which has been incurred upon


production for a period is extracted from the financial books
and the store records set out in a memorandum statement. If
this statement is confined to the disclosure of the cost of
units produced during the period, It is termed as Cost Sheet.”
Cont…
The Cost Sheet presents the following Facts:

 Total Quantity of Production


 Total Cost of Total Quantity Produced
 Per Unit Cost of Total Quantity Produced
 Various components of cost at various stages of production
like, Prime Cost, Factory Cost, Cost of Production, Cost of
Goods Sold, etc.
 Direct & Indirect Cost of Production
 The proportion of each individual cost to total cost expressed
in percentage.
 Comparative Cost of two periods and its analysis.
Types of Cost Sheet
 Simple Cost Sheet

 Cost Sheet With Profit

 Cost Sheet with Statement of Profit

 Comparative Cost Sheet


Simple Cost Sheet
 In simple cost sheet, the expenses on each item of cost are
classified and shown under various headings and along with
total cost of product, per unit cost of each item of expense is
also determined.

 This cost sheet only shows the total cost of product and cost
per unit but does not shows the profit.
Specimen of Simple Cost Sheet
Cost Sheet with Profit
 This cost sheet is prepared in accordance to the above cost
sheet and along with the total cost of production and per unit
cost, it also shows the total profit earned.

 This profit is the difference between sales value and total cost.
Specimen of Cost Sheet with Profit
Cont…
Cost Sheet with Statement of Profit
 This method of preparing the cost sheet is considered as more
proper and reliable.

 In this cost sheet, only the cost of production is shown and for the
purpose of profit determination a separate statement of profit and
loss is prepared.

 The cost of production is the aggregate of Prime Cost, Factory


Overheads and office and administration overheads and for profit
determination.

 In statement of profit, selling and distribution overheads are


added to cost of production to arrive at total cost. The total cost is
then deducted from sales to determine profit or loss.
Specimen of Cost Sheet with
Statement of Profit
Comparative Cost Sheet
 Comparative Cost Sheet can be prepared for two purposes.

 First, a study has to be made for the comparison of cost of two


periods which helps in determine that on which item the cost per
unit has increased, decreased or has remained stable. This analysis
can thus guides in identifying the reason of such change and helps
in controlling the cost.

 Secondly, when a manufacturer produces similar type of two


products and wants to determine the difference in cost of each
item of expense and further wants to take a decision as to
manufacturing of which product can be more profitable, the
needed information is easily available through this format of cost
sheet.
Specimen of Comparative Cost Sheet
Cost Component Appearing in Cost Sheet
 Prime Cost- The aggregate cost of direct material, direct labour
and direct expenses is known as Prime Cost.

Prime Cost= Direct Material + Direct Labour + Direct Expenses

The determination of prime cost leads to the classification of total


cost into direct and indirect cost. Indirect Costs are known as
Overheads.
 Factory Cost- When factory overheads are added to prime cost
then factory cost is achieved.

Factory Cost= Prime Cost + Factory Overheads


Cont…
 Office & Administration Cost- When office and administrative
expenses are added to factory cost, then office and administration
cost is derived. This cost is also known as Cost of Production.

Office & Administration Cost= Factory Cost + Office


Overheads

 Total Cost- When selling & distribution expenses are added in


cost of production, then the cost arrived is known as Total Cost.

Total Cost = Cost of Production + Selling & Distribution


Overheads

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy