Cost sheet proforma & expenses


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Cost sheet proforma & expenses

  1. 1. Faculty Guid :- Prof. Divyang Joshi Submitted By :- Disha Patel 27 Kalpan Patel 28 Section : - C SUB. :- Cost & Management Accountancy
  2. 2.  A cost statement or cost sheet is a document which provides cost for the assembly of the detailed cost of cost object or cost centre.  It is a detailed statement which indicates the break-up of cost arrangement in logical manner under different suitable head. KALPAN PATEL
  3. 3.  A cost sheet is a statement which shows the details regarding the total cost of a cost object, i.e. for the company as a whole, for a product or a job.  A cost sheet not only shows the total cost but also the various component of the total cost….. KALPAN PATEL
  4. 4.  It discloses the various elements of cost which make up the total cost.  It discloses the cost per unit as well as the total cost of output.  It facilities for preparation of tender price or selling price advance.  It comparison of current year’s total cost with the estimated cost and with the previous year’s cost. KALPAN PATEL
  5. 5.  It shows the total cost amount and the cost per unit of production.  It is helpful for the purpose of cost comparison.  It facilities the fixation of the selling price of different products.  It helps in cost control by ascertaining the actual operational efficiency as compared to the standard or targeted competitors. Kalpan Patel
  6. 6. Particulars Total cost  Direct material cost: opening stock of raw material Add: purchase of raw material less: closing stock of material  Cost of raw material consumed: Direct labour cost Direct expenses  PRIME COST;  Factory overheads  COST OF OPERATING  Add: opening stock of WIP  Less: closing stock of WIP Xxx Xxx Xxx Xxx Xxx Xxx XXX Xxx XXX Xxx Xxx
  7. 7. particulars Total cost  FACTORY COST:  Office & Administration cost  OFFICE COST / COST OF PRODUCTION: Add: opening stock of finished goods Less: closing stock of finished goods COST OF PRODUCTION OF GOODS FOR SALE  Selling & distribution cost  TOTAL COST  Add: Profit/Loss  SALES REVENUE  XXX  Xxx  XXX  Xxx  Xxx  XXX  Xxx  XXX  Xxx  XXX Kalpan Patel
  8. 8.  Expenses are part of the cost which are not of the nature of material and labour but are incurred due to business activities. In short, the amount spend for running a business is termed as expenses.  Direct expenses can be directly linked with a specific saleable product or service.  The expenses that cannot be identified or linked or attributed or allocated directly to the finished saleable product or services are termed as INDIRECT expenses. Kalpan Patel
  9. 9.  PRODUCTION/ MANUFACTURING EXP:  Production is the process of converting raw materials into finished goods through the use of labour, service & other facilities in factories.  The major elements of production cost are : Direct labour cost Direct material cost Direct overhead Kalpan Patel
  10. 10.  ADMINISTRATION EXPENSES:  It is the sum of those costs which are related to the general administration activities and general management activities which cannot be directly related to production, marketing, research & development, and financing functions of the business. Kalpan Patel
  11. 11.  SELLING EXPENSES: The amount of money spent on publicity and advertising, salesmen’s salaries and wages, sales executives’ salary, etc...  DISTRIBUTION EXPENSES: Cost incurred on delivering products and other related activities, e.g. to facilitate movement of goods in the hands of purchaser or customers are called as distribution expenses.. Kalpan Patel
  12. 12.  FINANCE EXPENSES:  Finance costs are those which are associated with external borrowed funds, e.g. interest paid or accrued on capital borrowed.  RESEARCH EXPENSES:  Research exp. Are those which are incurred in discovering of new ideas, new facts new application of accepted facts and improvement of existing products, process or equipments. Kalpan Patel
  13. 13.  PRIME COST: Prime cost consists of three important elements of costs, i.e direct materials cost, direct labour cost, and direct expenses. Generally, the prime cost constitutes the highest percentage of total costs.  FACTORY COST or WORK COST: It comprises of prime cost and factory overheads or factory expenses which include indirect material cost , indirect labour cost and indirect expenses. Work Kalpan Patel
  14. 14. cost denotes the expenses that are incurred in Converting raw material into finished products. the sum of direct labour cost, direct expenses, & manufacturing or factory expenses is also referred to as a CONVERSION cost.  OFFICE COST OF PRODUCTION: Office cost is the aggregate of works cost and office & administration expenses. Kalpan Patel
  15. 15.  TOTAL COST OR COST OF SALES:  When selling & distribution expenses are added to office cost , it is known as cost of sales.  Total cost serves the purpose of fixing the selling price by adding markup on total cost or a profit margin on total sale. The markup indicates a % of profit on total cost. Kalpan Patel
  16. 16.  if the word using is ‘margin’, then it means it is a profit as % of sale price. This concept is accepted in the global market. By comparing the total cost of present year with the previous and/or the budgeted year, it is possible to analyse the total cost; and in turn control the cost , if it has gone up. Kalpan Patel
  17. 17. Kalpan Patel