Introduction 1.

25

factory)
Indirect labour (in 2,500
Supervision costs (in factory) 1,000
Factory premises rent 1,600
Factory lighting 600
0ilfor machines 100
Depreciation of machines
500
Office overheads
8,000
Office salaries
2,000
Misc. office expenses 1,000
Seling and distribution overheads 6,000
Note: A profit margin of 20% on the total cost of goods is expected on the sale of Jeans.
Solution
Cost Sheet
Particulars
Total for Per unit
1,000 units

Direct materials 20,000

Direct labour 8,000
Prime ost 28,000 28.00
Works/Factory Overheads:
Indirect labour 2,500
Supervision costs 1,000
Factory rent 1,600
Factory lighting 600
Oil for machines 100
Depreciation of machines 500 6,300 6.30
Works Cost 34,300 34.30
Ofice and Adm. Overheads:
Office overheads 8,000
Office salaries 2,000
Misc. expenses 1,000 11,000 11.00
Cost of Production 45,300 45.30
Selling and Distribution Overheads: 6,000 6.00
Total Cost 51,300 51.30
Profit 20% of Cost 10,260 10.26
Sales 61,560 61.56

Illustration 1.3
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.
Direct material 57,000
Direct wages 28,500
 Selling Overhead wages
DirectDirect Solution:
Factory : materials 1.26
Office
Important
and and
Sales Showroom
rent
Advertisement
Salesmen's
salaries charges
stationery Office
Directors
Legalremuneration
Telephone
Printing
andpostageand salaries
Office manager's
depreciation
Factory
salary Factory
FactoryPlantPlant
Distribution Administration
Advertisement
Showroom
Salesmen's
Salessalaries remuneration
Telephone
chargespostage
Legal
rent stationery
Printing
andDirector'sOffice
depreciation
manager's
Factory
salary
and salaries Factory
FactoryPlantPlantOffice
rent repair
Note heating rent
and repairs rent
: and and heating rent
Cost Overhead rates and
Overhead: and
maintenance rates and
Sheet and
lighting and rates
maintenance rates
: Cost
has lighting
been Sheet

discussed for
the

in month
PROFITTotal Production
Costof Factory
Cost Prime
Cost
detail
of
in
Cost Jan.
Chapter (or ......
Cost 1,16,000
Output 5 2,5001.500 1,5001,6002,000 1,2501,000 2,500
of 500 150 100 200 400 500
-
Sales)

2,5001,500 1,5001,600 2,000 1,2501,0002,500

500 150 100 500 200 400
Costing. AcCouNCost

4,160 148 92 85: 285 57.

 Accounting
Standards. measurement
government
consistency
constituted. consistency Introduction
CASB Institute 4. 3. 2. 1. Cost
24. 23. 22. 21. 20. 19. 18. 17. 16. 15. 14. 13. 12. 11. 10. 9 8. 7 6. 5. 3. 2 1.CAS
ToToToIn
has make make make bring Accounting
in
bodies, in
so Cost of of cost
Treatment far
classification, cost cost
cost Cost cost Consistency
Overburden
Removal
Manufacturing
Cost Cost
Quality
Control Joint
Royalty Research
Costs Interest Selling Cost Expenses
CostRepairs Packing
MaterialUtilities Material
t Cost of
CosEmployee CostClassification
Determination
Capacity CostTitle
Depreciation
AmortisationanPollution
d Control
Administrative
OverheadsDirect Cost Cost Production
Determination of issuedAccounting accountingaccounting
inallocations
accounting
of of regulators,
Accountants Standards
and and Service and
manufacture
of and and Production 24
Revenue and in cOST
Technical Development Maintenance cost cost
practives.
Development Distribution Cost of Standards
measurement research data more data are
AverageOperation accounting
in Centre for or ofmore accounting
Accurate more ACCOUNTING a
Cost Know-How Captive serviceIndia, set
Overheads The
Costs Costs Cost Overheads Board agencies reliable. uniform of
Statements (Equalized) mai n
standards sector
and recognising and records. standards
Fee Consumption (CASB)
assignment
academic and objective. for functions STANDARDs
Cost as inter-rim that
of listed with providetothe
of
Transportation below
institutions
the of need CAS are
objective costguidance for Comparison. designed are: (CAS)
:
to
product structured
to to
ofachieve to
the achieve
formulating
and user
uniformityapproach uniformity
organisations,
services,
the
to
Cost has and the 1.27
and
 Questions
Objective
(A) Iype quauhed (CostWhat alone.
audit
cost and functions: the
4. 3. 2. 1.Are CIMAMeaning accounting there partnership privateAct time to viewlabour class ofaudited. orthe in
(whether 1.28
Information Main Cost Cost In possibly Apart Second First There labour The
the
Recordsindia,governs cost
London has The These companies,
to of Based
Cost function accounting These
time.
Rules achieve or production of
accounting
objective unit
following fromfunction is ofrecords be toCost calledare other Companies
and cost
misappropriations. has no sole on Or
Accourntant, Accounting
definition Cost
and these, the other
a
provided cost Audit) audit cost is defined proprietary,
cost optimum items
of
is is to Audit rules. audit above items Act coST
statements
costcentre a isaudit
there to verify plan". company COMPANIES of Cost goods
branch Rules,
governed check cost of These Records costprovions
. (Section
ACcOUNTING
accounting by holding is also. utilisation
are Accounting of
cost EXAMINATION
QUESTIONS in a that An cost etc. provisions
cost or
have third their audit appkicable These
of 2014 India? Thi s analysis cost CostRules publicor (COST
accounts financial True a cost audit of in 148)
the certificate and by third
function
adherence as auditAudit Rules
of the the
is or Section accounts "thegiven refers
only to Records empowers
same
to The of RECORDS resources Companies books RECORDS
is False function verification ordersOrder company)and only are of
determine
accounting. this service
meaning.
given Cost 148 of in aimed Rules
? of cost tohavedefinition The to of
Give practice and of are is AND in accounts the
to is the separately selected to
the aduit
in cost been Companies issued the to toAct, Central
income.
the reasons Accountants Works
Act, of
maintenance AUDIT) include AND
Companies fact have
economy. keep the
companys is which properly cost
authorised accounting
the shows on t
not
companieshe to Government of AUDIT
for accounts issued
th e RULES control details central particulars the
function is Act,
your to that selected of company
shareholders. Act, detect prepared, 2013 after costincorporated 2014. government over in RULES
to 2013 plan. other respect
answer. of cost and their relating directto
conduct or records.
the These and
all
errors a incompanies IN
read and audit check initial forms of
1959. types any operations
are prescribes, of getting
companies to
spers the INDIA
cost with and performs on other It utilisation
of notification does underbeing utilisation
Accordi
auu
ngly The audit to the only. business such AccouRCost
prevent Law. not the
amended and ,in
adherent: of cost of
o and two Hone: mea Compe cost resper
mate
o t af. w rer mat