cost ascertainment[1]
TRANSCRIPT
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Cost Ascertainment
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Cost
Amount of Expenditure (actual or notional) incurred or attributable to a
given thing- material purchased
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Cost Object
Anything for which a measurement of cost
is desired
It could be a product, Service, Customer,
Brand, Activity, Department
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Cost Assignment
Tracing Accumulated Costs that have direct
relationship to a cost object & allocating
accumulated costs that have an indirect
relationship to a cost object
Allocation & Apportionment
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Cost Accumulation
Collection of Cost Data in some organized
way by means of an accounting system
Keeping Cost Accounts
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Cost Unit
A unit of Quantity of product, service or time
in relation to which costs may be expressed
It is unit of Measurement of Cost
Automobile -numberCloth -metreSugar -QuintalTele-call -minute/secondsPower -KW/HTransport T/KM
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Cost Centre
A Location, person ,or item of equipment or
group of these for which costs may be ascertainedand used the purpose of Cost Control
Personal or Impersonal Cost CentreProduction And Service Cost Centre
Operation and Process Cost Centre
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Components Of Total Cost
Prime Cost Total Of DMC,DLC & DE
Factory Cost orWorks Cost - Prime Cost +Factory Overheads
Office Or COP- Factory Cost +AOH
Total Cost - COP+ Selling & Distribution OH
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Prime Cost
F Cost
COPcos
D Materials
D .Labour
D. Expenses
Prime Cost F. Overhead
F Cost
A.Overhead
COP
SD overhead
cos
PROFIT
salesCost Accumulation
Prime
Cost
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Components Of Total Cost
Direct Materials+ Direct Labor+
Direct Expenses
Prime Cost+Factory Over Heads
Factory Cost
+Administration
OverheadsCOP
+SD Overheads
Prime Cost Or
Direct Cost
Factory Or Works OrManufacturing Cost
Office Cost Or
Cost Of Production
Total Cost Or
Cost Of Sales
Cost Of Sales
+Profit
Selling Price
Or Sales
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Cost Sheet
Reveals Total Cost Of Production Per Unit
Discloses Break Up Of Total Cost
Helps in Preparation Of Estimate
Helps in Fixing Sales Price
Comparison Of Costs
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Few Instructions for Preparation
Of Cost Sheet
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Particulars Total(Rs.) Per Unit(Rs.)
Opening Stock of Raw Materials
Add : Purchases
Expenses on Purchases
Less: Closing Stock of Raw Materials
Value of raw materials consumed
Director LabourDirect Expenses
Prime CostFactory Overheads :
Add OP stock OF WIP
Less Cl. Stock of WIP
Factory Cost
Office & Administration Overheads+ Opening Stock Of FG
-Cl Stock Of FG
Cost of ProductionSelling and distribution Overheads
Cost of Sales
Profit
Sales
COST SHEETName of the Company ----------------------------
Cost Sheet of (Name of the Product) -----------------
For the period ending ------------------------------
Units--
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Preparation Of Cost Sheet
1 Computation Raw Materials Consumed
2 Computation Of Value of Work In Progress
3 Computation Of Value Of Finished Materials
4 Computation Of Profit5 Estimation Of Overheads
6 Treatment Of Scrap/By Product
7 Treatment Of Shortage of FG
8 Treatment Of Subsidy
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Preparation Of Cost Sheet
1 Computation Of Raw Materials Consumed
Opening Stock Of Raw Materials ---------
Add Purchases Of Raw Materials ---------
Expenses On Purchase --------
------------
Less Closing Stock Of Raw Materials-----
Defective Materials Returned -----Abnormal Wastage Of RM ------
Cost Of Raw Materials Consumed
Opening Stock Of Raw Materials ---------
Add Purchases Of Raw Materials ---------
Expenses On Purchase --------
------------
Less Closing Stock Of Raw Materials-----
Defective Materials Returned -----Abnormal Wastage Of RM ------
Cost Of Raw Materials Consumed
Opening Stock Of Raw Materials ---------
Add Purchases Of Raw Materials ---------
Expenses On Purchase --------
------------
Less Closing Stock Of Raw Materials-----
Defective Materials Returned -----Abnormal Wastage Of RM ------ ----------
Cost Of Raw Materials Consumed ------------
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Preparation Of Cost Sheet
2 Computation Of Value Work In ProgressConsists of
Cost Of Materials To date
Cost Of Labor to date Factory Overheads to date
Valued At Factory Cost
Prime Cost
Add Opening Stock Of WIP
Less Closing Stock Of WIP
Factory Cost
Value At Prime Cost
Direct Materials
Direct LabourDirect Expenses
+OP Stock Of WIP
-CL Stock Of WIP
Prime Cost
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Preparation Of Cost Sheet
3 Computation Of Value Of Finished Materials
Cost Of Production ---
Add Opening Stock Of FG---
Less Closing Stock Of FG----
Cost Of Goods Sold
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Preparation Of Cost Sheet
4 Computation Of Profit
1 Profit As % of Cost( Total Cost Given)
Profit=Cost x Profit%
100
2 Profit as a percentage of Selling Price (Total Cost is given)
Profit=Cost X Profit%
100-profit%3 Profit as percentage Of Cost ( Selling Price is given)
Profit =Selling Price x Profit %
100+profit%
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Preparation Of Cost Sheet
6Treatment Of Scrap/By Product-
Reliable Value deducted from FOH
7 Treatment Of Shortage of FGNormal Shortage added to Cost Of Production
8 Treatment Of Subsidy
To be deducted from profit
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Items Excluded From Cost
1 Purely Financial Incomes
2 Purely Financial Charges
3 Appropriation Of Profit
4 Abnormal Expenses
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Items Excluded From Cost
Purely Financial Incomes Interest On Investments Interest on Bank Deposits Share Transfer fee Rent Receivable Capital Profit
Dividend Received Cash Commission or Discount
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Items Excluded From Cost
2 Purely Financial Charges
Capital LossesDamages Payable
Penalties and FinesExpenses On Transfer Of Company OfficeInterest On Bank Loan, DebenturesDiscount On Bonds etc
Losses on investmentCash Discount
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Items Excluded From Cost
3 Appropriation Of Profit
Appropriation Of Sinking FundDividend PaidTaxes On Income & ProfitsCharitable DonationsTransfer To Reserves
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Items Excluded From Cost
4 Abnormal Expenses & Losses
Cost Of Abnormal Wastage of MaterialsLoss by theftLoss by fireCost of Abnormal Idle TimeExceptional Bad Debts
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Factory Overhead
Operating Supplies- lubricating Oil, detergent, Welding Materials, paints,
nuts, bolts, dyes, nondurable tools
Repairs & Maintenance-gears, pulleys, belts, washers
Labour cost of Set up, Inspection, Rearranging of Machinery & Equipments
Unproductive Wages or Indirect Wages
Factory Rent
Internal Transport, Overhead CraneFactory Rates & Insurance
Power & Fuel
Salaries of Foremen ,Supervisor ,technical Directors & Staff
Wages of gateman, time keeper, factory Clerk, Tool Room Staff store keeper
Lighting & Heating Of Factory
Depreciation Of PM, Factory building, tools
Waste Disposal
Training Factory Staff
Canteen
Drawing Office Cost,
Dispensary
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Administration Overheads
Rent, Rates & Insurance of Gen OfficeLighting Heating Of OfficeOffice SalariesDepreciation of office building, furniture, equipmentsBank Charges,
Audit Fee,Counting House,Legal ExpensesOffice Telephone & Postage,Printing & StationerySuperannuationetc
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Selling & Distribution Overheads
Salaries, commission, traveling of sales StaffAdvertising,Catalogues, price listsRent & Rates,Maintenance & Insurance of Sales Office, Show RoomsSelling Department Salaries & Stationery
Bad Debts, Collection ChargesTelephones & Postage for SellingTrade DiscountMarket ResearchCarriage Out and transport Normal Wastage of finished GoodsSamples
Warehousing ExpensesPacking,Rent, Rates & Insurance Of WarehouseDep & Running Cost Of Delivery VansWages of Packers ,Van Drivers