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.

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..

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 years total cost
with the estimated cost and with the previous
years cost.

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.

Particulars

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

Total cost

Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
XXX
Xxx
XXX
Xxx
Xxx

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

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XXX
Xxx
XXX
Xxx
Xxx
XXX
Xxx
XXX
Xxx
XXX

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.

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

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.

SELLING EXPENSES:
The amount of money spent on publicity
and advertising, salesmens 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..
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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.

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

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.

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.

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.

krish