Cost Sheet
A cost Sheet
means deep information about the cost of production. It is a technique to calculate
the cost of a product. The cost of the product means incurred from raw material
consumption until finished goods are sold in the market.
Main Aspect of Cost Sheet
- Prime Cost
- Cost of Production
- Cost of Goods Sold
- Cost of Sales
Direct Material Consumed
Opening Stock of Raw Material ($)
(+) Purchase of Raw Material ($)
(+) Freight Inward of Raw Material ($)
(-) Closing Stock
of Raw Material (-$)
(-) Scrap/Wastage of Raw Material (-$)
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Raw Material Consumed ($)
Prime Cost
Raw Material Consumed ($)
(+) Direct Wages/Labour ($)
(+) Direct Expenses ($)
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Prime Cost ($)
Cost of Production
Prime Cost ($)
(+)Factory Overhead ($)
Gross Factory Cost/Work Cost ($)
(+) Opening Stock of Work in Progress ($)
(-) Closing Stock of Work in Progress (-$)
Net Factory Cost/ Factory Cost ($)
(+) Administration Overhead Related to Production($)
(+) Quality Control ($)
(+) Research & Development ($)
(+) Primary Packing ($)
(-) Scrap of Sales During Production (-$)
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Cost of Production ($)
Cost of Goods Sold
Cost of Production ($)
(+) Opening Stock of Finished Goods ($)
(-) Closing Stock of Finished Goods ($)
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Cost of Goods Sold ($)
Cost of Sales
Cost of Goods Sold ($)
(+) Selling and Distribution ($)
(+) Selling Related Indirect Manufacturing Exp($)
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Cost of Sales ($)
Sales - Cost of Sales= Net Profit
Direct Cost of Product
- Direct Material
- Direct Labour
- Direct Expense
Indirect and Overhead Cost of Product
- Factory Over Head
- Office & Administration OH
- Selling & Distribution OH
Classification of Cost in The Cost Sheet
Research & Development Cost:- The cost incurred for product innovation is called research and development cost.
Packaging Cost:- The packing cost includes only the primary packing used for the protection of the product/goods. Example of a toothpaste tube. Secondary packing that is transportation is not included.
Distribution Overhead: - The cost of delivery of a product in a different material or to a customer's location, which is a cost related to transportation, for example, the salary of employees involved in the distribution of goods.
Direct Material:- It refers to materials that are a major part of the finished product and can be easily traced to units, it also includes primary packing material.
Selling Overhead:- Costs related to the sales department and expenses incurred on product marketing, for example, cost of advertisement, maintenance of the website for online sales, staff salary, and other expenses of the sales department.
