PROFORMA OF COST SHEET

ELEMENT IN COST SHEET

1. prime cost
2. factory cost or work cost
3. cost of production
4. total cost

these are defining as follows:-

1. PRIME COST: It refers to the total cost of three important elements of cost such as direct material, direct labour, direct expenses the aggregate of all direct element of cost is collectively known as prime cost
2. FACTORY COST/ WORK COST: total of prime cost and and sum of factory overhead is collectively known as factory cost or work cost. It is the actual expense incurred In converting of raw material in to finished goods.
3. COST OF PRODUCTION: it includes all expenses incurred to the production, this is the aggregate of work cost and office and administration expenses.
4. TOTAL COST: it is the sum of cost of production and selling and distribution expenses. It is the total cost that taking for selling price, so this is know as selling cost