Differentiate between cost sheet, cost statement and

based on cost acconting

1. Differentiate between cost sheet, cost statement and production account Presented to: Dr. Amitabha Maheshwari (faculty guide) Presented by: Lotus Mondal (20) Shubham Chaturvedi (53) Vivek Kumar (64) ( B.Com IV Sem )

2. Topics covered Meaning Cost sheet Statement of cost Production account Difference between cost sheet and statement of cost Difference between cost sheet and production account

3. Cost sheet It is a statement which is used to determine the total cost of goods produced or units in a specific period, and in which total cost, per unit cost and cost incurred at various stages from manufacturing a products to the stage of making it saleable are shown . “Cost Sheets are prepared for the use of management and consequently they must include all the essential details which may assist the manager in judging the efficiency of Production .” - Wheldon

4. Statement of cost Statement of Cost is a memorandum statement which is not made according to the double entry system . It is a statement which is made for calculating total cost, per unit cost and budget cost of product .  All  elements of cost in statement of cost are taken from financial accounting's historical records . In cost sheet per unit cost of each item of expense is calculated whereas in statement of Cost it is not done.

5. Production account The production account is presented in the form of an account based on double entry principle . The object of this account is to show the cost of production, along with the cost per unit in a detailed and analytical way. This account may be drawn up at short intervals, e.g., monthly . It is also known as ‘manufacturing account’ is used for industries producing Bricks, Coal and coke, Iron, Yarn and Cloths etc.

6. Difference between cost sheet and statement of cost In cost sheet, per unit cost of each item of expenses is calculated whereas it is not shown in statement of cost. Cost sheet can be prepared only when quantity of output is given in the question. If quantity is not given in the question, then statement of cost is prepared. Cost sheet is more useful than statement of cost in case of comparison of two products or two periods.

7. Difference between cost sheet and production account Cost Sheet: It is not based on double entry system . Cost sheet is used for preparing tenders and quotations.. It is prepaid in the form of a statement . Expenses are classified to ascertain different divisions of cost as prime cost, works cost, total cost etc. Figures of previous year are provided to enable comparison. It is based on actual and estimated figures of expenses. Production Account: It is based on double entry system . It is not useful for preparing tenders and quotations. It is prepared in the form of an account. Expenses are not classified in this account. No comparison in possible due to non availability of previous year’s figures. It is based on actual figures of expenses.

8. Thank you