Cost sheet1


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Cost sheet1

  1. 1. Cost sheet
  2. 2. Element to be ignored while preparing Cost Sheet (a) Expenses not related to the product. Ex : Donation ,Gift etc. (b) Abnormal Expenses and Losses. Ex : Loss by fire, theft etc. (c ) Fictitious / Intangible Assets written off. Ex : Goodwill W/off, Preliminary exp. W/off etc.
  3. 3.  (d) Expenses after Profit. Ex : Income tax etc. (e) Appropriation of Profits. Ex : Dividends, Transfer to G.R. etc (f) Financial Expenses / Losses. Ex : Interest payment, Cash discount, Bad debts etc. (g) Incomes other than Sales and Sale of Scrap. E.g.: Interest received, rent received, Dividend recd.etc.
  4. 4. To find out Qty.Mfg / Qty. SoldParticulars Units Opening Stock of finished goods xxx Add : Qty.Mfg. (Finished Goods) xxx Less : Closing stock of finished goods xxx Qty.Sold (Finished goods) xxx
  5. 5. Valuation of Opening & Closingstock of finished goods (a) Closing Stock Finished of Goods :- To be valued at current year’s cost of production per unit. (b) Opening Stock of Finished goods :- To be valued at previous year’s cost of production per unit. If previous year cost of production is not given →Assume it to be the same as current years
  6. 6. Valuation of finished goods byweighted average methodParticulars Units Total cpu CostCost of Production 1000 10000 (10)Add : Opening Stock of 200 2300finished goodsLess : Cl.stk.of finished 100 1025Goods 10000+2300 1000+200=10.25 Goods soldCost of 1100 11275 (10.25)
  7. 7. Types of Problems (1) Simple format based Problems. (2) Problems based on Reverse Working. (3) Problems based on estimated cost sheet (variable, fixed & Semi variable costs) (4) Problems where break up of semi variable cost not given. (5) Problems based on Total Cost Ratios.
  8. 8. 1.Simple format based Problems.
  9. 9. (2) Problems based on ReverseWorking Some basic information missing. E.g : Purchase of raw material → Some other extra information given. E.g : Cost of goods sold Start with the extra information given in the Question.
  10. 10. (3) Problems based on estimatedcost sheets. Prepare Actual Cost Sheet of the previous year. →Give the effects of variable, fixed & semi variable cost in the estimated cost sheet as given below. (a) Variable cost : Change In Cost Per Unit Column →Give effect of change in price in the per unit column . If no change in the price Maintain the same amt. in the per unit column.
  11. 11.  (b) Fixed Cost : Change In Total Cost Column →Give effect of change in price in the Total Cost column . If no change in the price. Maintain the same amt. in the Total cost column.
  12. 12.  (C) Semi Variable Cost :- →Find the break-up of semi variable cost between fixed & variable cost. →Change in the variable portion →Effect should be given in per unit column. →Change in the fixed portion →Effect should be given in total cost column.
  13. 13. Bifurcation of Costs into Variable,Fixed & Semi variable →Direct material →Direct wages Always variable cost →Direct Expenses →Factory Overheads Can be variable or →Office Overheads fixed or even semi variable →Selling Overheads If specified → Follow the specifications. If not specified →Consider them as Fixed Cost
  14. 14. IMPORTANT POINTS (1)In case of a semi variable cost → Give break up of fixed & variable portion in previous years actual cost sheet. (2) Closing stocks of Actual Cost Sheet → Not to be included as opening stock in Estimated Cost Sheet.
  15. 15. (4) Problems where break up ofsemi variable cost not given . →Find out the variable cost per unit Variable Cost = Difference in cost Per Unit Difference in qty
  16. 16.  → Find out Total variable cost. Variable cost per unit X No.of units → Find out Fixed cost. F.C = Semi Variable cost – Total Variable cost
  17. 17. (5) Problems based on Total CostRatios Total cost (Consolidated cost) is given &Cost sheet to be prepared for two or morethan two products. Formula to Divide the Total Cost betweenthe various products.
  18. 18.  A B Cost Per Unit Ratio X : X X Qty.Mfg. / Sold Ratio X : X Total Cost Ratio X : X Only for selling expenses qty.sold Ratio should be used.