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COST SHEET
Cost Sheet is defined by CIMA, U.K. as “A document which provide for the
assembly of the detailed cost of a cost centre or cost unit”.
Thus, cost sheet is a periodical statement of cost designed to show in detail the
various elements of cost of goods produced like prime cost, factory cost of
production and total cost. It is prepared at regular intervals. Comparative figures of
the previous period may also be shown in the cost sheet so that assessment can be
made about the progress of the business.
COST SHEET FOR THE MONTH OF JANUARY
UNITS PRODUCED .......
UNITS SOLD ...........
Particulars Cost Per Amount Amount
Unit(RS)
DIRECT MATERIALS
Opening Stock of Raw Material XXXX
Add: Purchase of Raw materials XXXX
Add: Carriage on purchase XXXX
XXXX
Less: Closing stock of Raw Materials XXXX
Raw Materials Consumed XXXX
DIRECT WAGES (LABOUR) XXXX
DIRECT CHARGES ( EXPENSES ) XXXX
PRIME COST (1) XXXX
Add :- FACTORY OR WORKS OVER HEADS:
Factory Overheads XXXXX
Factory Cost or Works Cost -----(2) XXXXX
ADD: OFFICE & ADMINISTRATIVE EXPENSES XXXXX
Office & Administrative Expenses XXXXX
Cost of Production ---------(3) XXXXX
Add: Selling & Distribution Overheads XXXXX
Cost of Sales --------(4) XXXXX
Add: Profit(B/F) XXXX
Sales
XXXXX
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COST SHEET – FORMAT
Particulars Cost Per Amount Amount
Unit(RS)
DIRECT MATERIALS
Opening Stock of Raw Material ***
Add: Purchase of Raw materials ***
Add: Purchase Expenses ***
Less: Closing stock of Raw Materials ***
Raw Materials Consumed *** ***
DIRECT WAGES (LABOUR) ***
DIRECT CHARGES ( EXPENSES ) ***
PRIME COST (1) ***
Add :- FACTORY OR WORKS OVER HEADS:
Factory Rent ***
Factory Power ***
Indirect Material ***
Indirect Wages ***
Supervisor Salary ***
Factory Insurance ***
Drawing & office salary ***
Factory Asset Depreciation *** ***
WORKS COST INCURRED ***
Add: Opening Stock of Work-in -progress ***
Less: Closing Stock of Work-in -progress ***
WORKS COST (2) ***
ADD:- OFFICE & ADMINISTRATION OVER HEADS:-
Office Rent ***
Depreciation & Repair of office equipment ***
General Charges ***
Audit Fees ***
Bank Charges ***
Counting house Salary ***
Other Office Expenses ***
COST OF PRODUCTION (3) ***
Add: Opening stock of Finished Goods ***
Less: Closing stock of Finished Goods ***
COST OF GOODS SOLD ( 4) ***
Add:- SELLING AND DISTRIBUTION OVERHEADS:-
Sales man Commission ***
Sales man salary ***
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Traveling Expenses ***
Advertisement ***
Delivery man expenses ***
Sales Tax ***
Bad Debts ***
COST OF SALES (5) ***
Profit (balancing figure) ***
SALES ***
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Problem.No.1
The following cost data are available from the books for the year ended 31.12.2024
Direct materials Rs.1,66, 000
Direct wages Rs.1, 18,000
Direct expenses Rs.72,000
Factory overheads Rs.48,000
Office & administrative overheads Rs.36,000
Sales Rs.6, 00,000
Prepare a cost sheet indicating the prime cost, works cost, production cost, cost of
sales and sales value.
Problem.No.2 : Prepare a cost sheet from the following details:
Raw materials consumed Rs.80,000
Wages- Rs.20,000
Works expenses are charged at 100% of wages
Office overhead is charged at 25% on works cost
Selling overhead at 10% on works cost.
Problem.No.3 : From the following information prepare a Cost sheet for the month
of January
Particulars Rs.
st
Stock of raw materials on 1 January 25,000
st
Stock of raw materials on 31 January 26,200
Purchase of raw materials 21,900
Carriage on purchases 1,100
Sale of finished goods 72,300
Direct wages 17,200
Non-productive wages ( Indirect Wages) 800
Direct expenses 1,200
Factory overheads 8,300
Administrative overheads 3,200
Selling overheads 4,200
Problem.No.4: Bangalore Ltd. Supplies you the following information and required
you to prepare a Cost sheet.
• Stock of raw materials on 1ST Sept 2023 Rs 75000
• Stock of raw materials on 30th Sept 2024 Rs 91500
• Direct wages Rs 52500
• Indirect wages Rs 2750
• Sales Rs 200000
• Work – in – Progress on 1st Sept 2023 Rs28000
• Work – in – Progress on 30th Sept 2024 Rs 35000
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• Purchases of Raw Materials Rs 66000
• Factory rent, rates and power Rs 15000
• Depreciation of plant and machinery Rs 3500
• Expenses on purchase Rs 1500
• Carriage Outward Rs 2500
• Advertising Rs 3500
• Office rent and taxes Rs 2500
• Traveller’s wages and commission Rs 6500
• Stock of finished goods on 1st Sept 2023 Rs 54000
• Stock of finished goods on 30st Sept 2024 Rs 31000
Problem.No.5
From the following information prepare a cost sheet to show: Prime cost, Works cost,
COP, COS, and Profit
Raw material Purchased Rs 32250
Carriage on purchases Rs 850
Direct wages Rs 18450
Factory overheads Rs 2750
Selling overheads Rs 2450
Office Overheads Rs 1850
Sales Rs 75000
Sale of factory scrap Rs 250
Opening stock of finished goods Rs 9750
Closing stock of finished goods Rs 11100.
Problem.No.6
From the books of accounts of M/s Aryan Enterprises, the following details have
been extracted for the year ending March 31st 2024
Stock of Raw Materials
Opening – Rs 188000
Closing – Rs 200000
Materials purchased during the year Rs 832000
Direct wages Rs 238400
Indirect wages Rs 16000
Salaries to administrative staff Rs 40000
Freight Inwards Rs 32000
Freight Outwards Rs 20000
Sales Rs 15,79800
Cash Discount allowed Rs 14000
Bad Debts written off Rs 18800
Repairs to plant and machinery Rs 42400
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Rent, Rates and Taxes
Factory Rs 12000
Office Rs 6400
Travelling expenses Rs 12400
Salesmen’s Salaries and commission Rs 33600
Depreciation written off Plant and machinery Rs 28900
Depreciation written off Furniture 2400
Directors fees Rs 24000
Electricity charges (Factory)Rs 48000
Fuel( for boiler) Rs 64000
Sale of Scrap Rs 500
General charges Rs 24800
Manager’s salary Rs 48000
The manager’s time is shared between the factory and office in the ratio of 20: 80.
Prepare a Cost sheet
Problem.No.7
Prepare a statement showing cost and profit from the following details. Clearly
showing (a) Prime cost (b) Works cost (c) Cost of production(d) Cost of sales and (e)
Profit
Particulars Rs. Particulars Rs.
Direct wages 1,50,000 Direct materials 5,00,000
Power 2,500 Oil and water 2,500
Storekeeper’s wages 5,000 Transfer to general 5,000
Factory rent 25,000 reserve 12,500
Office rent 12,500 Foremen’s salary 7,500
Repairs: Factory lighting 2,500
Factory plant 17,500 Office lighting
Office building 2,500 Depreciation 2,500
Goodwill written off 2,500 Factory plant 6,250
Consumables stores 12,500 Office building 25,000
Director’s fees 6,250 Manager’s salary 2,500
Telephone rent 625 Office stationery 1,250
Salesmen’s salaries 6,250 Postage 2,500
Advertising 6,250 Travelling expenses 2,500
Income tax 50,000 Warehouse rent 10,000
Sales 9,47,500 Dividend paid -N0
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Problem.No.8
The following data have been extracted from the books of Sunshine Industries ltd.,
for the year 2023:
Rs. Rs.
Opening Stock of Raw Material 25,000 Indirect Consumption of Material 500
Purchase of Raw Material 85,000 Salary –Office 2,500
Closing Stock of Raw Material 40,000 -Salesmen 2,000
Carriage Inward 5,000 Other Factory Expenses 5,700
Wages-Direct 75,000 Other Office Expenses 900
Wages-Indirect 10,000 Manager’s Remuneration 12,000
Rent and rates-Factory 5,000 Other Direct charges 15,000
-Office 500 Advertisement Expenses 2,000
Depreciation Travelling Expenses of Salesmen 1,100
-Plant & Machinery 1,500 Carriage and Freight Outward 1,000
-Office Furniture 100 Sales 2,50,000
Other selling expenses 1,000 Advance Income-tax paid 15,000
The manager has the overall charge of the company and his remuneration is to be
allocated as Rs.4,000 to the factory,Rs.2,000 to the office and Rs.6,000 to the selling
operations. From the above particulars prepare a statement showing
(a) Prime cost;
(b) Factory cost;
(c) Cost of production;
(d) Cost of sales; and (e) Net profit.
Problem.No.9
Following information has been obtained from the records of a manufacturing
concern:
1st Sep.,2024 30th Sep.,2024
Rs. Rs.
Stock of Raw material 40,000 50,000
Stock of Finished goods 1,00,000 1,50,000
Stock of Work-in- 10,000 14,000
progress
Rs. Rs.
Indirect labour 50,000 Administration expenses 1,00,000
Lubricants 10,000 Power 30,000
Insurance on plant 3,000 Direct labour 3,00,000
Purchase of raw 4,00,000 Depreciation on machinery 50,000
materials
Sale commission 60,000 Factory rent 60,000
Salaries of salesmen 1,00,000 Repairs on factory building 11,000
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Carriage outwards 20,000 Sales 12,00,000
Prepare a statement of cost and profit showing (a) cost of raw materials consumed;(b)
prime cost;(c) total manufacturing cost;(d) factory manufacturing cost;(e) cost of
production;(f) cost of goods sold;(g) cost of sales; and (h) profit.
Problem.No.10
Mr.Gopal furnishes the following data relating to the manufacturing of a standard
product during the month of April 2024:
Raw materials consumed Rs.15,000
Direct wages Rs.9,000
Machine hours worked 900 hours
Machine hour rate Rs.5
Administrative overhead 20% on works cost
Selling overhead Re.0.50 per unit
Units produced: 17,100
Units sold : 16,000 at Rs.4 per unit.
You are required to prepare a cost sheet from the above showing:
(a) The cost per unit
(b) Profit per unit sold and profit for the period.
Problem.No.11
From the following information for the month of January, prepare a cost sheet to
show the following components: a) Prime cost; b) factory cost; c) Cost of production;
d) Total cost.
Particulars Rs.
Direct material 57,000
Direct wages 28,500
Factory rent and rates 2,500
Office rent and rates 500
Plant repairs and maintenance 1,000
Plant depreciation 1,250
Factory heating and lighting 400
Factory manager’s salary 2,000
Office salaries 1,600
Director’s remuneration 1,500
Telephone and postage 200
Printing and stationery 100
Legal charges 150
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Advertisement 1,500
Salesmen’s salaries 2,500
Showroom rent 500
Sales 1,16,000
PROBLEMS ON COST SHEET
PROBLEMS ON TENDERS / QUOTATIONS
Quite often the management has to quote prices of its products in advance or has to
submit tenders for goods to be supplied. For this purpose an estimated cost sheet has
to be prepared. Such an estimated cost sheet is prepared to show the estimated cost
of products to be manufactured. In this cost sheet, cost of direct materials, cost of
direct wages and various types of overheads are pre-determined on the basis of past
costs after taking into account the present conditions and also the anticipated changes
in the future price levels. Overhead are absorbed on the basis of a suitable method of
absorption like percentage of direct materials, or wages or machine hour rate, etc.
Calculation of profit: After the total cost has been estimated, a desired percentage
of profit is added to arrive at the price to be quoted. Such profit may be given as a
percentage of cost or percentage of selling price. In order to calculate the amount of
profit, it is easy to assume that figure as 100 on which profit percentage is given and
then calculate the amount of profit.
Calculation of percentages:
A. Factory overheads as a percentage of Direct wages:
= Factory overheads X 100
Direct Wages
B. Office & Administration overheads as a percentage of factory cost:
= Office & Administrative Overheads X 100
Works Cost
C. Selling overheads as a percentage of factory cost:
= Selling Overheads X 100
Factory Cost
D. Distribution overheads as a percentage of factory cost:
= Distribution Overheads X 100
Factory Cost
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E. Profit as a percentage of total cost or cost of sales:
= Profit X 100
Cost of Sales
Problem.No.12
The accounts of a machine manufacturing company disclose the following
information for the six months ending 31st Dec 2024
Rs.
Materials used 1,50,000
Direct wages 1,20,000
Factory overhead expenses 24,000
Office Expenses 17,640
Prepare a Cost Sheet of the machines and calculate the price which the company
should quote for the manufacture of a machine requiring materials valued at Rs 1250
and expenditure on productive wages of Rs 750 so that the price may yield a profit of
20% on the selling price.
For the purpose of price quotation charge Factory overheads as a percentage of direct
wages and administration overheads on work cost.
Problem.No.13
In respect of a factory the following particulars have been extracted for the year 2024
Rs.
Materials used 6,00,000
Productive wages 5,00,000
Factory overhead expenses 3,00,000
Administration Charges 33,6,000
Selling Charges 2,24,000
Distribution Charges 1,40,000
Profit 4,20,000
A work order has to be executed in 2024 and the estimated expenses are:
Materials Rs 8000, Wages Rs 5000.
Assuming in 2025, the rate of factory overheads has gone up by 20%,
Administration charges have gone down by 10% and selling and Distribution
charges have gone each up by 15%. At what price should the product be sold so as
to earn the same rate of profit on the selling price in 2024.
Factory overheads are based on wages and administration, selling and distribution
overheads on factory cost.
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Problem.No.14
The following extracts of costing information relate to commodity X for the year
ending 31-12-2024
Purchases of raw materials Rs 6000
Direct Wages Rs 5000
Rent, Rates and insurance Rs 2000
Carriage inwards Rs 100
Stock ( 1-1-2024)
Raw materials Rs 1000
Finished products – 200 tonnes Rs 800
Stock ( 31-12-2024)
Raw materials Rs 1100
Finished products – 400 tonnes ?
Cost of factory supervision Rs 400
Sale of finished products Rs 15000
Advertising and Selling cost is 40 paise per tonne sold.
3000 tonnes of the commodity were sold during the year.
Prepare a cost sheet.
Problem.No.15
E. Ltd Furnish the following information for 10000 units of a product manufactured
during the year 2023
Materials Rs 90000
Direct Wages Rs 60000
Power and consumable stores Rs 12000
Indirect Wages Rs 15000
Factory lighting Rs 5500
Cost of rectification of defective work Rs 3000
Clerical salaries and management expenses Rs 33500
Selling expenses Rs 5500
Sale proceeds of scrap 2000
The net selling price was Rs 31.60 per unit sold and Repairs and maintenance Rs
11500
all units were sold.
As from 1.1.2024, the selling price was reduced to Rs 31 per unit. It was estimated
that production could be increased in 2024 by 50% due to spare capacity.
Rates for materials and direct wages will increase by 10%
You are required to prepare:
Cost sheet showing the various elements of cost per unit
Estimated cost and profit
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Assume that 15000 units will be produced and sold during the year and factory
overheads will be recovered as a percentage of direct wages and office and selling
expenses as a percentage of works cost.
