Cost Sheet and Tender

 

Cost Sheet

Cost Sheet is a statement of cost showing the total cost of production and profi t or loss from a particular product or service. A Cost Sheet shows the cost in a systematic manner and element wise. A typical format of the Cost Sheet is given below.

 

 Cost Sheet for the period…………………………………..

Production …………………………. units

 

Particulars Amount (Rs.) Amount (Rs.) 
A. Direct Materials Opening Stock 
                   + Purchases
                   + Carriage inwards
                    – Closing Stock
B. Direct Wages
C. Direct Expenses
I. Prime Cost ( A + B + C )
D. Factory Overheads- Indirect materialsLoose Tools

Indirect wages

Rent and Rates ( Factory)

Lighting and heating ( F )

Power and fuel

Repairs and Maintenance

Drawing office expenses

Research and experiment

Depreciation – Plant ( F )

Insurance – ( F )

Work Manager’s salary

II. Factory Cost/Works Cost ( I + D )
E.      Office and Administrative Overheads
          Rent and Rates – office
          Salaries – office
          Insurance of office building and equipmentsTelephone and postage
          Printing and Stationery
          Depreciation of furniture and office equipments
          Legal expenses
          Audit fees
          Bank Charges
III. Cost of Production ( II + E )
F. Selling and Distribution Overheads 
Showroom rent and rates 
Salesmen’s salaries and commission 
Traveling expenses 
Printing and Stationery – Sales Department 
Advertising 
Bad debts 
Postage 
Debt collection expenses 
Carriage outwards 
Depreciation of delivery van 
Debt collection expenses 
Samples and free gifts 
IV. Cost of Sales ( III + F
V. Profit/Loss 
VI. Sales ( IV + V

 

A glance at the above cost sheet will reveal that it works out the total cost of production/service in a phased manner. In other words, total costs are segregated into elements like Prime Cost, Factory or Works Cost, Cost of Production, Cost of Sales and fi nally the profi t/loss is worked out by comparing the total cost with the selling price. Appropriate adjustments are made for opening and closing stock of Work in Progress and also opening and closing stock of fi nished goods. The format of cost sheet may be suitably changed according to the requirements of each fi rm but the basic form remains the same.

Reconciliation of profit  shown  by financial accounts and cost accounts.

In integral system of accounting, we need not reconciliation of cost and financial accounts. But when we keep our cost and financial accounts separately, we need to reconciliation of cost and financial accounts like reconciliation of bank statements and cash book. With this, we can find the difference in profit or loss which are shown as per cost accounts and financial accounts.

Meaning of Reconciliation of Cost and Financial Accounts

Reconciliation of Cost and Financial Accounts is process to find all the reasons behind disagreement in profit which is calculated as per cost accounts and as per financial accounts. There are lots of items which are shown in the profit and loss account only  when we make it as per financial accounting rules. There are lots of items which are shown in costing profit and loss account only when we calculate profit as per cost accounting.

Suppose, we have taken the profit or loss as per financial accounts, we adjust it as per cost accounts. In the end of adjustments, we see same profit as per cost accounts. If we have taken profit as per cost account, we have to adjust items as per financial accounts. For this purpose, we make reconciliation Statement

1st Case. When we have to adjust items as per financial accounts

 

 (+) in Rs.  (-) in Rs.
 (A)  Profit as per cost accounts

  XXXXX

Add

XXXXX

1 Profit on sale of asset

XXXXX

2 Dividend received

XXXXX

3 Imputed Rent Charges

XXXXX

4 Overvaluation of opening stock in cost accounts

XXXXX

5 Undervaluation of closing stock in cost accounts

XXXXX

6  Excess of material, Labour and overhead cost which is shown as per cost accounts or Overcharge of  Material, Labour and overhead cost as per cost accounts or Over-absorption any expense as per cost accounts

XXXXX

7 Interest Received on Investment

XXXXX

8 Bank Interest Received

XXXXX

9 Under valuation of Closing Stock as per cost accounts

XXXXX

(B)Less
1 Loss on Sale of Asset XXXXX
2 Dividend Paid XXXXX
3 Financial Expenses
a) discount (b) fine and penalties (c) bank interest (d) underwriter’s commission (e) Donations (f) interest paid on capital
XXXXX
4 Undercharge or under absorption of any expense or loss as per cost account XXXXX
5 over valuation of closing stock as per cost accounts XXXXX
Profit as per financial Accounts (A) – (B)

XXXXXX

 

2nd Case. When we have to adjust items as per cost accounts

In this, we take the profit as per financial accounts in the beginning, we add all the times which we have shown in less in above 1st Case. We deduct all the items which we have shown above in Add in 1st Case. After this, balance will be the profit or loss as per cost accounts.

 

 

 

 

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