Cost Sheet

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Cost sheet is a statement, which shows various components of total cost of a product. It classifies and analyses the components of cost of a product. It is a statement which shows per unit cost in addition to Total Cost. Selling price is ascertained with the help of cost sheet. The details of total cost presented in the form of a statement is termed as Cost sheet. Cost sheet is prepared on the basis of : 1. Historical Cost 2. Estimated Cost Historical Cost Historical Cost sheet is prepared on the basis of actual cost incurred. A statement of cost prepared after incurring the actual cost is called Historical Cost Sheet. Estimated Cost Estimated cost sheet is prepared on the basis of estimated cost. The statement…show more content…
Generally there are three types of stock as (1) Stock of Raw material, (2) Stock of work in progress and (3) Stock of finished goods. The treatment of stock in cost sheet has been given in a separate Performa. (c) Estimated cost sheet or price quotation: Price quotation means quoting the minimum price for obtaining a specific order. The quotation is send in the form or estimated cost sheet having one column. In estimated cost sheet all elements of cost and overhead expenses are calculated in the following manner. * Estimated direct material * Estimated labor cost * Estimated overheads Elements of Cost Raw materials are converted into finished products by a manufacturing concern with the help of labor, plants etc. The elements that constitute the cost of manufacturing are known as elements of cost. The elements of cost include the following: •Material •Labor •Expenses Each of these elements is again subdivided into direct and indirect material. Direct material, direct labor and direct expenses are those which can be traced in relationship with a particular process, job, operation or product. Indirect material, indirect labor and indirect expenses are those which are of general nature and cannot be traced in relationship with a particular process, operation, job or product. Direct material Direct labor together constitute prime cost Direct expenses Indirect material Indirect labor of the factory together constitute

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