How will you prepare cost sheet?Explain with example.
Answers
Answer:
A cost sheet is a statement prepared at periodical intervals of time, which accumulates all the elements of the costs associated with a product or production job. It is used to compile the margin earned on a product or job and forms the basis for the setting of prices on similar products in the future. We shall study the Cost Sheet Format in detail.
Cost Sheet Format
A Cost Sheet depicts the following facts:
Total cost and cost per unit for a product.
The various elements of cost such as prime cost, factory cost, production cost, cost of goods sold, total cost, etc.
Percentage of every expenditure to the total cost.
Compare the cost of any two periods and ascertain the inefficiencies if any.
Information to management for cost control
Calculate and summarize the total cost of the product.