1. Unit or Output Costing-I
(Cost Sheet ,Cost Statement and
Production Account)

2. Meaning
• Unit or Output costing is used in those
industries or organisations where standard
products are produced from a common
process and all the units produced are more
or less similar to each other.
• This method is also known as “Single Costing
Method”.

3. Definition of Unit or Output Costing
“Unit Costing method is a Method of costing
applied to ascertain the cost per unit or
production where standard and identical
products are manufactured.
Walter W.Bigg.

4. Charachterstics of Unit Production
• Production should be uniform or
Homogeneous
• Identical products
• The cost unit should be physical /natural
• Per Unit cost should be determined ,for eg.Per
ton, per metre etc.

5. Objectives of Unit /Output Costing
• To know the totsl cost of production
• To classify cost under related categories such as prime
cost,works cost etc.
• To determine the effect of each element of cost
• To compare cost during two or more periods
• To determine proposed setting price to earn desired profit
• To Determine tender price on the basis of Cost Data and
Fututre prospects.

6. Elements of cost under Unit /Output
costing
•
•
•
•
Materials
Labour
Direct expenses
Overheads

7. Methods of determining Unit Cost
1) Cost Sheet
2) Statement of Cost
3) Production Account

8. Cost Sheet
• Cost sheet is a statement which is used to
determine the total cost of goods produced in
a specific Period and in which total cost,per
unit cost and cost incurred at various stages
from manufacturing a products to the stage of
making it saleable are shown.

9. Definition of Cost sheet
• “Cost Sheets are prepared for the use of
management and consequently they must
include all the essential details which may
assist the manager in judging the efficiency of
Production.”

10. Facts about Cost sheet
•
•
•
•
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 i.e. Prime cost,factory cost
• Direct and Indirect cost of production
• Comparative cost of two productsand its analysis
• Proportion of each individual cost to total cost
expressed in percentage.

11. Advantages of Cost sheet
•
•
•
•
•
Determination of selling Price
Control on Expenses
Help in Minimising the Expenses
Comparative study of Cost
Benefit to common man

12. Difference between Cost Account and
Cost Sheet
Cost Account
• Double Entry System
• Used in
ProductionA/cs,Process A/cs
• No help in making comparison
• No ascertainment of Cost per
unit
• Helpful in Reconciliation
• Based on cost sheet
• Cost Accounts are not helpful
in control and Guidance
Cost Sheet
• No Double Entry System
• Used Monthly,weekly
• Helpful in knowing
Comparisons
• Ascertain Cost per Unit
• No help in Reconciliation
• Cost sheet helps in cost
control and guidance

13. Types of Cost Sheet
1)
2)
3)
4)
Simple Cost Sheet
Cost Sheet with Profit
Cost Sheet with Statement of Profit
Comparative Cost Sheet

14. 1.)Simple Cost Sheet
(for Month---)
Particulars
Total Cost (Rs.)
Cost Per Unit(Rs.)
Direct Material
Direct Wages
Direct or Chargeable
Expenses
------------
-------------
-------
------
-------
------
-------
-------
Office Overhead
-------
-------
(C) Cost of Production
-------
-------
Selling and Distribution
Expenses
-------
-------
(D) Total Cost
------
-------
(A) Prime Cost
Work Overhead /Factory
Overhead
(B) Works Cost
Units------

15. 2.)Cost Sheet with Profit
Particulars
Cont…
Total Cost (Rs.)
CostPerUnit(Rs.)
-------
------
-------
------
Opening stock of Direct Raw Material ---Add: Purchases during the Year
---Add : Incidental Expenses(Carriage , Freight,Octroi ,
Custom Duty)
---Less: Closing Stock of Direct Raw Material ----Less: Defective Materials Returned
Less: Residue used in other products
Cost of direct raw material consumed
Direct Wages/Labour Charges or Productive Wages
Direct Expenses /Chargeable Expenses
(A) Prime Cost
Add: Work Overhead /Factory Overhead
Factory Oncost/Un Productive Labour
Indirect Wages/Unproductive Labour
(Fuel,Power,coal,Light & water,Factory
Insurance,Rent of factory,Dep. On Factory
Building/machine Repairs on factory Building
/machine

16. Cost Sheet with Profit
Particulars
cont…
Total Cost (Rs.)
CostPerUnit(Rs.)
-------
------
Add:Office and administrative Overheads/Office exp ------Legal Expenses,Office Expenses,Office salaries,office
Lighting,Adm. Expenses,Printing and stationery,fees
of Directors,telephone &Telegrams,Managing
Director’s Salary(office),Dep.on Office
building/furniture,Repairs to office
building/Furniture
------
Add: Opening Stock of work in progress
Less: Closing Stock of Work in Progress
Add: Additional Overburden on Rectification
Less: Sale of Scrap/Defective etc.
Factory /Works Cost
Office Cost or cost of Producion
------
------
------
------
Add: opening stock of Finished Goods
Less: Closing Stock of Finished Goods
Cost of Goods Sold

17. Cost Sheet with Profit
Particulars
cont…
Total Cost (Rs.)
CostPerUnit(Rs.)
-------
------
-------
------
-------
--------
Add: Selling & Distribution Overheads:
Advertisement
Discount
Travelling Expenses
Salesman Commission
Dep.On Delivery Vans
Packing and Distribution Charges
Bad Debts
Upkeep of Delivery Vans
Warehouse Rent,etc.
Cost of Sales
Profit( certain % on total cost or sales)
Selling Price

18. 3.)Cost Sheet with statement of profits
Particulars
Total cost (Rs.) Cost per unit ( Rs.)
Direct Material
Direct Wages
Direct or Chargeable Expenses
Prime Cost
Factory /Works Overheads:
Factory Expenses
Light
Rent of Factory
Unproductive wages
Factory/Works Cost
Office and Administrative Overheads:
Office Salaries,Office Rent Dep. On Office
Building & EquipmentGeneral Expenses etc.
Cost of Production
-------
--------

19. Statement of profits
Particulars
Total cost (Rs.)
Cost per unit (Rs.)
Cost of Production for ---units@rs.---perunit
---------
-------
Selling and distribution overheads:
Selling Expenses
Bad Debts
Discount
Advertisement etc.
--------
-------
------
--------
-------
--------
--------
---------
Cost of Sales
Profit
Sales/Selling Price

20. 4.)Comparative Cost Sheet
Period/Product
Period/Product
Total
Cost per Particulars
cost(Rs.) unit(Rs.)
Total
cost
(Rs.)
----
--------- -------
-----
Direct Material,Direct Wages,Direct or
Chargeable Expenses
(A)
--------------------`
Cost per
unit (Rs.)
Prime Cost
Work Expenses:Fuel,Electric Power
,Repairs,Depreciation,Rent)
(B)
Work Cost
Office Expenses,Office salaries,office lighting
(C)
Total Cost
--------
-------
------
--------
-------
--------
--------
---------
------
-------
Profit(% on Cost Price or Sales Price)
(D)
Selling Price

21. 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.

22. Components of Cost
•
•
•
•
Prime Cost
Factory/Works Cost
Office and administration cost
Total Cost

23. Prime Cost
• Prime cost is the main element of cost of any
product.It is also called “Direct cost”, “ First
Cost”, “ Flat Cost”.
• Prime Cost= Direct Material + Direct Wages
+Direct Expenses

24. Factory Cost
• Factory overheads includes the expenses
which are of indirect nature and are incurred
in factory or production process or in
operating and controlling production activity.
• Factory/Works Cost =Prime Cost + Factory
Overheads

25. Office and administration cost
• The expenses which are incurred in operating and
controlling the business are included in Office
and 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

26. Total Cost
• When selling 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.

27. Thanks