Components of cost sheet.pptx

Components of cost sheet.pptx

• 1.
  Cost Sheet
• 2.
  Components of Cost •Prime Cost • Factory/Works Cost • Office and administration cost • Total Cost
• 3.
  Prime Cost • Primecost is the main element of cost of any product.It is also called “Direct cost”, “ First Cost”, “ FlatCost”. • Prime Cost= Direct Material + Direct Wages + Direct Expenses
• 4.
  Office and administrationcost • The expenses which are incurred in operating and controlling the business are included in Office & administration cost. Expenses incurred on effective functioning and maintenance of business, policy creation and implementation are termed as office and administrative expenses. • Rent, rates and tax of office building,expenses on Light and Cleaning of office premises etc. • Cost of Production= Factory cost + Office and administration cost
• 5.
  Total Cost • Whenselling and distribution expenses are added in cost of production , then cost arrived is known as Total Cost. • Expenses of sales office, salary & commision allowed to sales manager, travelling expenses of sales representative, Advertisement, Bad Debts, Price-List, Samples, gifts, Discount allowed to customers etc.
• 6.
  Statement of Cost •Statement of Cost is a memorandum statement which is not made according to the double entry system. • It is a statement which is made for calculating total cost, per unit cost and budget cost of product. • All elements of cost in statement of cost are taken from financial accounting's historical records. • In cost sheet per unit cost of each item of expense is calculated whereas in statement of cost it is not done.
• 7.
  Difference between Cost Accountand Cost Sheet CostAccount CostSheet • Double Entry System • Used in Production A/cs, Process A/cs • No help in making comparison • Not ascertained • Helpful in Reconciliation • Cost Accounts are not helpful in control and Guidance • Based on cost sheet • No Double Entry System • Used Monthly, weekly • Helpful in making Comparisons • Ascertain cost per Unit • No help in Reconciliation • Helps in cost control and guidance