...attibuted to cost and which cannot be directly attributed but are incurred upto their sales. You need to know the composition of cost at different stages. This will help you in the analysis of cost of a product so that same can be used for its proper management. In this lesson you will learn about cost sheet and its various components. OBJECTIVES After studying this lesson, you will be able to: state the meaning and type of Cost Sheet; state the importance of Cost Sheet; explain the components of total cost; prepare the cost sheet as per format. COST SHEET : MEANING AND ITS IMPORTANCE Cost sheet is a statement, which shows various components of total cost of a product. It classifies and analyses the components of cost of a product. Previous periods data is given in the cost sheet for comparative study. It is a statement which shows per unit cost in addition to Total Cost. Selling price is ascertained with the help of cost sheet. The details of total cost presented in the form of a statement is termed as Cost sheet. Cost sheet is prepared on the basis of : 1. Historical Cost 2. Estimated Cost Historical Cost Historical Cost sheet is prepared on the basis of actual cost incurred. A statement of cost prepared after incurring the actual cost is called Historical Cost Sheet. Estimated Cost Estimated cost sheet is prepared on the basis of estimated cost. The statement prepared before the commencement of production is called estimated cost sheet. Such cost sheet is useful...
Words: 666 - Pages: 3
...Cost Sheet For the period ended…………….. Raw Material Inventory, Beginning Add: Purchase of Raw Material Less: Purchase return & allowances Less: Purchase discount Net Purchase Add: Trade in or Freight in Cost of Goods purchased Cost of raw material available for use Less: Raw material inventory, Ending Cost of raw material used/consumed Add: Direct Labor Prime Cost Add: Factory Overhead: Indirect Material Indirect Labor Other indirect expenses Total manufacturing cost Add: Beginning W-I-P Cost of input put into the process Less: Ending W-I-P Cost of good manufactured Add: Beginning finished goods inventory Cost of goods available for sale Less: Ending Finished goods inventory Cost of goods sold Add: Operating expenses: Selling and Distribution Administrative Expense Cost of sales Net Profit Sales xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx Excercise2-3 CyberGames Income Statement Sales ....................................................... $1,450,000 Cost of goods sold: Beginning merchandise inventory ............ $ 240,000 Add: Purchases...................................... 950,000 Goods...
Words: 789 - Pages: 4
...breakfast habits change as they grow older. Take hot cereal as an example, there is a clear relationship between age and consumption incidence: • 15-24 years old: 37% • 25-34 years old: 45% • 35-49 years old: 53% • 50-64 years old: 64% [insert chart?] The percentage of those aged 50-64 consuming hot cereal for breakfast is 1.7 times that of the younger generation (aged 15-24)! The greatness of hot cereal is not to be denied and much appreciated by the older clan. As one becomes older, a lower cholesterol diet is preferred for health and well-being, making hot cereal the ideal choice over others. highest rate among all age groups. They are also the most likely to eat cold cereals or even dim sum (both 49%). Isotonic and energy drinks, which have become a trend in the West over the last decade, are also most popular with this group, with 22% drinking it regularly for breakfast. By contrast, the more ‘traditional’ drinks such as tea (48%) and coffee (34%) are less popular with them, although still at a reasonably high level. [insert chart?] The next group (25-34s), having proudly grown up and leading an active life, sees small changes in their breakfast habits; a bit less milk (58%) or fruit and vegetables (34% – lowest score among all age groups). Instead they drink more coffee (38%), could be as wake-up routine, as stimulant to cope with their busy lifestyle; and interestingly, more yoghurt (26% – most consumed within this age group). [insert chart?] Age brings...
Words: 1825 - Pages: 8
...Cost concepts, classification of cost, cost sheet and material costing Cost concepts, classification of cost, cost sheet and material costingCost concepts, classification of cost, cost sheet and material costingCost concepts, classification of cost, cost sheet and material costingCost concepts, classification of cost, cost sheet and material costingCost concepts, classification of cost, cost sheet and material costingCost concepts, classification of cost, cost sheet and material costingCost concepts, classification of cost, cost sheet and material costingCost concepts, classification of cost, cost sheet and material costingCost concepts, classification of cost, cost sheet and material costingCost concepts, classification of cost, cost sheet and material costingCost concepts, classification of cost, cost sheet and material costingCost concepts, classification of cost, cost sheet and material costingCost concepts, classification of cost, cost sheet and material costingCost concepts, classification of cost, cost sheet and material costingCost concepts, classification of cost, cost sheet and material costingCost concepts, classification of cost, cost sheet and material costingCost concepts, classification of cost, cost sheet and material costingCost concepts, classification of cost, cost sheet and material costingCost concepts, classification of cost, cost sheet and material costingCost concepts, classification of cost, cost sheet and material costingCost concepts, classification...
Words: 785 - Pages: 4
...each period, with each job having different production requirements. 2. Costs are accumulated by individual job. 3. Job cost sheet is the key document controlling the accumulation of costs by a job. 4. Unit costs are computed by job on the job cost sheet (Similarities between Job Order and Process Costing System, nd). Process Costing: 1. A single product is produced either on continuous basis or for long periods. All units of product are identical. 2. Costs are accumulated by departments. 3. The department production report is the key document showing the accumulation and disposition of costs. 4. Unit costs are computed by department on the department production report (Similarities between Job Order and Process Costing System, nd). The job order cost system is most suitable when the products differ in types of material and work performed. Thus, each product is made according to the customer's specifications and the price quoted is closely tied to estimated cost. Examples of types of companies which might use job order costing are printing companies and shipbuilding firms (Fletcher, nd). The process cost system is commonly used where products are manufactured under mass production methods or by continuous processing. Industries using process costs are paper, steel, chemicals, and textiles. Assembly-type processes such as washing machines and electrical appliances would also use process costs (Fletcher, nd). Job order costing system makes since for my company to...
Words: 308 - Pages: 2
...to allocate funds of $158000 to different advertising alternatives in a way that will maximise the impact achieved. This particular model can be used for determining how much funds should be allocated, considering the constraints, to each advertising medium in order to optimise average impact. It also helps in finding out the total and individual costs of advertisements. Layout of model (in blocks): 1) Requirements- minimum and maximum amount of ads required can be entered in this block for each advertising medium. The Cost per unit of each medium is also entered in the requirements area. 2) Resources available- This is the funds available section and would act as a constraint so the advertisements price doesn’t increase the funds available. 3) Calculation area- when solver is run this part of spreadsheet shows the number unit of advertisements that should be bought and their total cost price 4) Report area that tells the impact of each advertisement and the average impact. Instructions: 1) Enter the variable minimum and maximum amount of ads required for each type of advertising and their variable cost prices respectively. All three have to be allocated in their respective columns B,C and D. Only numbers or currency can be entered in this area of the spreadsheet. 2) Enter the variable amount of funds to be allocated in the resource availability block in cell...
Words: 1295 - Pages: 6
...identify where costs can be cut or reduced and still keep the agency functioning. Below data from past year. Program Area Costs Administration Salaries: Administrator 60,000 Assist 35,000 2 Secretaries 42,000 Supplies 35,000 Advert & promotion 9,000 Professional meetings/dues 14,000 Purchased Services:Acct & bill 15,000 Custodial 13,000 Security 12,000 Consulting 10,000 Community Mental Health Services Salaries (two s w) 46,000 ;Trans 10,000 Outpt mental health tx Salaries:Psychiatrist 86,000 2 SW 70,000 Give a Give a dollar range of costs to reduce budgets (worst and best case analysis). You need to cut $94,000 in cost. Prioritize those cuts that can be made withwithout impacting the operation or quality care of the organization.How would you advise Dr. White to prepare for reduced budgets? excel spread sheet Solution To be able to answer the questions and decide on costs that could be cut, we must divide costs into discretionary and committed costs. Discretionary Fixed Costs (also known as Managed Fixed Costs) usually arise from annual decisions by management to spend in certain fixed costs. There are basically 2 differences between Discretionary and Committed Fixed Costs; 1) The planning horizon for Discretionary Fixed Costs is fairly short-term, usually a single year; and 2) Discretionary Fixed Costs can be cut for short periods of time with minimal damage to the long-run goals of the organization. In the attached excel sheet I listed all costs & divided them...
Words: 581 - Pages: 3
...WORK. HAVE A WORKING KNOWLEDGE OF THE VOCABULARY AT THE END OF THE CHAPTER. REVIEW ALL EXERCISES AND PROBLEMS ASSIGNED. CHAPTER 14 Who are the users of managerial information? What are the distinguishing features of managerial accounting? Explain the management functions. Know how to calculate Cost of Good Sold and Cost of Goods Manufactured. What is product cost, manufacturing costs and period costs? What are the three inventory accounts and how are they presented on the balance sheet? What is gross profit? What is the value chain? What is ERP? What is just-in-time inventory? What is TQM? What is the balanced scorecard? CHAPTER 15 Explain the characteristics and purposes of cost accounting What is Job order costing? What is Process costing? What are the four steps in the Job order flow of costs? Know how to prepare journal entries to record the purchase of raw materials, factory labor costs incurred, manufacturing overhead incurred, the assignment of direct materials, direct labor and manufacturing overhead to jobs during the month, assignment to finished goods and cost of goods sold. How does the job cost sheet help in accumulating manufacturing costs? Understand and know how to calculate the predetermined overhead rate or traditional costing Know how to calculate over and under applied overhead and how is it recorded in the financial statements....
Words: 263 - Pages: 2
...manufacturing overhead consists of costs that cannot be practically traced to jobs. Therefore, if these costs are to be assigned to jobs, they must be allocated rather than traced. 3-2 Job-order costing is used in situations where many different products or services are produced each period. Process costing is used in situations where a single, homogeneous product, such as cement, bricks, or gasoline, is produced for long periods. 3-3 The job cost sheet is used to record all costs that are assigned to a particular job. These costs include direct materials costs traced to the job, direct labor costs traced to the job, and manufacturing overhead costs applied to the job. When a job is completed, the job cost sheet is used to compute the unit product cost. 3-4 A predetermined overhead rate is used to apply overhead cost to jobs. It is computed before a period begins by dividing the period’s estimated total manufacturing overhead by the period’s estimated total amount of the allocation base. Thereafter, overhead cost is applied to jobs by multiplying the predetermined overhead rate by the actual amount of the allocation base that is recorded for each job. 3-5 A sales order is issued after an agreement has been reached with a customer on quantities, prices, and shipment dates for goods. The sales order forms the basis for the production order. The production order specifies what is to be produced and forms the basis for the job cost sheet. The job cost sheet, in turn, is used to summarize...
Words: 11544 - Pages: 47
...BUS 475Final Exam 101/101 Questions with Answers Correct 100% ANSWERS ARE HERE… 1) The income statement and balance sheet columns of Pine Company's worksheet reflects the following totals: Income Statement Balance Sheet Dr. Cr. Dr. Cr. Totals Closing entries are necessary for __________. A. temporary accounts only B. permanent accounts only C. permanent or real accounts only D. both permanent and temporary accounts 2) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead? A. General corporate liability insurance B. Factory janitor C. The western division’s vice president’s salary D. Cost of landscaping the corporate office 3) Which list below best describes the major services performed by public accountants? A. Employee training, auditing, bookkeeping B. Bookkeeping, mergers, budgets C. Cost accounting, production scheduling, recruiting D. Auditing, taxation, management consulting Read more: 4) The conceptual framework developed by the Financial Accounting Standards Board __________. A. are rules that all accountants must follow B. was approved by a vote of all accountants ...
Words: 1894 - Pages: 8
...Current Event Article-RFID Prasanna Kumar Mandipudi Wilmington University How Cognizant Cut Costs by Deploying RFID to track IT assets Cognizant is 8 billion dollor firm with over 70000 working people in all its organizations across the globe. Cognizant is key IT service provider for all top ten industries ranging from healthcare to insurance. Cognizant offers system integration technology to all vital industries for instance cognizant provides imaging technology for Healthcare Industry. Cognizant have over 40 delivery centers and 30 huge data centers. With large data centers, Asset management and tracking of company’s assets at employee laptop level is very crucial challenge to company. The misplacement of company’s prominent piece of data asset affects company’s leases and compliances. The use of excel sheets and spread sheets to record the location of data at rack level is expensive and labor intensive. The audit of datacenters every two years involves most highly paid IT people. The company’s first choice of barcode and passive RFID is ineffective. Cognizant RFID Center of Excellence developed an active RFID solution to provide “Real time Inventory and asset awareness for high valued corporate assets. cognizant roped in this technology for asset management. Each asset is tied with an active tag like server blade which plays key role in tracking of asset. RF code rack readers are mounted to ensure and to notify even an inch move of the asset in the rack. Dual...
Words: 386 - Pages: 2
...Unit 1 Lecture This unit explores the general business environment, in the Prologue, and the reason for the existence of managerial accounting in Chapter 1. Managers are in need of information. Managerial accounting is the vehicle that satisfies that need. Without reasonable, valid, timely information companies will always be at a disadvantage when it comes to competing in the marketplace. Managers use the provided information to carry out three major activities: planning, directing and motivating, and controlling Planning involves the identification of alternative business plans. The plans that are most beneficial to the company should be reviewed and implemented if feasible. The implementation process involves budgets. Budgets are prepared under the direction of a controller, a manager in charge of the accounting department. Typically, budgets are prepared annually. We will learn more about budgets in chapter 7. Besides analyzing business alternatives managers must direct and motivate employees. As we know, unhappy, unguided employees can be detrimental to a business. I have worked for companies where one employee would stifle other employees to the point where he had to be fired. Productivity is paramount to profitability. In addition to managing personnel, managerial must keep the company running in an orderly fashion by analyzing daily sales reports, among other reports, to ensure there are no bottlenecks in production, falling sales within certain product groups...
Words: 1568 - Pages: 7
...The Principles, Benefits and Compliance of Lean Accounting As a way to reduce costs, manufacturing businesses today are looking for a leaner approach to production and are focusing on the overall process of producing an item to eventually sell to a consumer. This process is called the value stream, which is defined in Cost Accounting: A Managerial Emphasis as “the value-added activities needed to design, manufacture, and deliver a given product or product line to customers” (Horngren, Datar, & Rajan, 2014, p. 635). With the assistance of technology advancements to support with the communication of the different components of the value stream, processes have been developed, like Just in Time (JIT) production, that allow for the lean production of merchandise. Dan Woods describes this lean production process, in an article published in Forbes: “In a lean process, the demand signals pull the materials through the flow processes and the right number of products is created with as little waste as possible. When all the suppliers of materials are also making their processes lean, the result is that the entire supply chain is extremely responsive and efficient. “ (Wood, 2009) To go along with this lean production system, lean accounting was developed as “a costing method that focuses on value streams, as distinguished from individual products or departments, thereby eliminating waste in the accounting process” (Horngren, Datar, & Rajan, 2014, p. 635). This paper will summarize...
Words: 1410 - Pages: 6
...than budget. Actual revenue is greater than budget. Actual costs are less than budget. Unfavorable occurs for the opposite: Actual production is less than budget. Actual revenue is less than budget. Actual costs are greater than budget. Static vs. Flexible Budgeting: Static is for a designated level of activity. Flexible budgeting can provide different scenarios (expected). Flexible budgeting adjusts what costs should have been based on actual level activity (actual). Standard Cost: expected or budgeted cost of materials, labor, and manufacturing overhead required to produce one unit of product (Unit Std Cost = Price Standard * Quantity Standard) Price Standard: price that should be paid per unit of input (such as pound of material). Input (Quantity) Standard: quantity of input allowed per unit of output (for example, pounds of material allowed per one unit of product). Standard Cost Sheet: calculates the total standard cost for one unit of product. Why Use Standard Costing? To improve planning and control. To facilitate product costing. When to investigate variances? If variances are material, and the benefits will exceeds costs of investigation and corrective action. Which variances to investigate? F or U?? How to record variances? How are they closed out? 79 STANDARD COSTING EXERCISE Standard Cost Sheet for Dudley Door Company’s deluxe door: Std. Qty Std. Price Std. Cost Direct Materials 10 lbs./u $5.00/lb. Direct Labor 4 hrs...
Words: 1106 - Pages: 5
...CitySoft is focusing on cost, operational control, systems, and quality at the expense of company growth. CitySoft must understand its cost measurement structure, implement consistent quality control systems, understand pricing and financial data, and demand a level of control and consistency across the various locations of company in order to grow and remain profitable. A fixed-fee cost structure is imperative to maintain cost control, especially as clients routinely request changes without a formal mechanism to track its additional cost and process impact. Fixed-fee (fixed bid) projects require strong project management to keep projects profitable. Any added costs not captured in the initial contract fee will ultimately affect the bottom line. Without a thorough understanding of cost structure and project variation, it is nearly impossible to obtain a fixed-fee that can remain relevant throughout the duration of the project. 2. As a business model refinement strategy, CitySoft should begin to collect market related statistical data to decide what kind of business it wants to be: Internet service provider or custom consulting. Project management systems can be broadly categorized into two branches: project development, and maintenance service. On a one time basis, cost estimation for a new development project in fixed-fee format should include overhead, and for maintenance projects the time and material format would help to address CitySoft’s cost management system issues...
Words: 807 - Pages: 4
