1.

calculation for power generated through captive power plant separately Separate
Cost of production for neck manufacturing
2. The total process cost from routing through activity types and overheads (Works & Admin
overheads) through costing sheet
3. Comparison of the Target Price (Product & size wise) with the standard Cost and Actual Cost,
4. Standard Cost Estimates (SCE) are required to include following costs
- Depreciation charges-Financial charges (Interest on LC charges)
5. SCE should be analyzed as under :
Material + Activity Type for Process Cost + Costing Sheet for Production Overhead +
Depreciation + Financial charges = Cost of Goods Manufactured (COGM)

Cost of Goods Manufactured +Sales Overhead = Cost of Goods sold (COGS)

6. Cost of production should be analysed as under :
We require analysis of cost of production under various material heads both in the standard
cost estimate as well as in the Production order level analysis.
a. Raw materials
b. Cullet
c. Sub material
d. Packing.
7. Material costs should be accounted as under :
The BOM contains the standard recipe for manufacturing an intermediate or finished product.
Raw Material will be valued at MAP and semi finished / finished goods will be valued at
current standard cost estimate saved in the material master.
Cullet generated at various stages of production should be reduced from cost of production of
particular product at standard cost.
09. Activity cost & overheads will be considered as follows:
The Process cost shall be absorbed in the product through activity types. The Planned Activity
rates shall be maintained for the activity types. The planned Activity rates will be calculated on
a monthly basis by the Costing department.
Cost of service cost center shall be absorbed in the product through overhead (works &
Admin overheads). The overhead percentage shall be defined for each product.
8. Actual Cost with Product Cost Collector:
Product Cost Collectors shall be created to capture the cost of production. In the case where
the same product is manufactured in more than one line of production separate Production
versions shall be maintained.
The Raw material cost, Activity cost, Overhead etc shall be captured in the Product cost
Collectors. The Raw Material will be issued to production at Moving Average Price
maintained in the material master.
Cost shall be captured at different cost centers, at the period-end these cost shall be
allocated to a production cost center via Distribution cycles.
The Production department will confirm the output quantity. Whenever the Production
Quantity is confirmed the Product Cost Collector shall be debited with material cost and
activity cost and the respective production cost centre shall be credited. The Activity cost shall
be debited with a value as follows: Confirmed Production quantity X Plan activity Rate
maintained in the Activity Master.

The costing department can update the actual rate of the activity at the period end by
revaluating the cost at actual rates. This option will be decided upon during the course of
realization phase. Thus process costs shall be available on the Product cost collectors on an
online basis.
The cullet generated during the production process shall be treated as a by-product. The
cullet shall be valued at the price maintained in the material master (standard price) X
quantity generated and the same shall be deducted from the total cost of production.
The Fixed Cost shall be captured at the period-end with the help of Cost sheets. The Fixed
cost shall be absorbed to the products based on the quantity of Output or based on
percentage method. The same shall be finalized during the realization phase.