Definition cost sheet new

Cost sheet

1. COST SHEET
Vinita Kale
MIT School of Management, Pune

2. Cost sheet is defined as “a document which
provides 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 ,cost of production and total cost.

3. It is prepared on regular intervals e. g. weekly,
monthly , quarterly , yearly ,etc.

4. PURPOSE OF COST SHEET
It reveals the total cost and cost per unit of goods
produced.
It discloses the break – up of total cost into
different elements of cost.
It provides a comparative study of the cost of
current period with that of the corresponding
previous period.

5. It controls cost.
 It acts as a guide to management in fixation of
selling price & quotation of tenders.

6. IMPORTANCE OF COST SHEET
Cost ascertainment-The main objective of the
cost sheet is to ascertain the cost of a product.
Cost sheet helps in ascertainment of cost for the
purpose of determining cost after they are
incurred. It also helps to ascertain the actual cost
or estimated cost of a Job.

7. Fixation of selling price-To fix the selling price of
a product or service, it is essential to prepare the
cost sheet. It helps in fixing selling price of a
product or service by providing
detailed information of the cost.

8. Help in cost control-For controlling the cost of a
product it is necessary for every manufacturing
unit to prepare a cost sheet. Estimated cost sheet
helps in the control of
material cost, labour cost and overheads cost at
every point of production.

9. Facilitates managerial decisions-It helps in
taking important decisions by the management
such as: whether to produce or buy a component,
what prices of goods are to be quoted in the
tender, whether to retain or replace an existing
machine etc.

10. ANY QUESTIONS ???

11. THANKING YOU !!!