SRI KRISHNA ARTS AND SCIENCE

COLLEGE
Course: Applied Cost Accounting
DEPARTMENT OF COMMERCE
Sub Code: 19COP09
Programme: I M.Com
Unit: I
Google classroom : bre115s Map
Code : G
Term: Academic Year 2018-19 ; Even Semester
Faculty: Dr. K.R. Sivabagyam

APPLIED COST ACCOUNTING

ATTENDANCE

APPLIED COST ACCOUNTING

SNAP TALK

APPLIED COST ACCOUTNING

 Production Statement
❖ It is a statement which gives detailed information
regarding the costs incurred, total cost, selling price of
the goods and profit or loss during a particular period.
❖ It also gives information regarding cost per unit, selling
price per unit and profit or loss made per unit or output
and contains the corresponding data for the previous year.
❖ It is prepared for a month, quarter etc.,
 Production Account
❖ If the production statement and the cost sheet are drawn in
the form of a ledger account, then it is known as
production account.
 Production Account
Particulars Units Rs. Particulars Units Rs.
To D. Materials *** By Cost of production c/d ***
To D. Wages ***
To D. Expenses ***
To Prime cost ***
To Factory cost ***
Works cost ***
To administrative cost ***
To opening stock of finished goods *** By cost of goods sold ***
Cost of production b/d *** By closing stock of finished goods ***
By Cost of goods sold *** By sales ***
To selling & distribution overheads ***
To Profit ***
Total *** Total ***
 Tender or Quotations
❖ The price quoted for future production is called Quotations price or Tender
price.

❖ This price is ascertained on the basis of previous Cost Sheet or Production

Account.

❖ In drawing tenders or quotations, the estimation of the cost of production is an

essential point.

❖ The price to be quoted in tender includes a reasonable percentage of profit.

 Tender Price
Tender is an offer inviting quotations to do a certain work.
Cost sheet is useful for determining tender/bid price by providing information
element wise and component wise.
In preparing tender price probable changes in the input prices should be taken
into account.
Fixed costs should be ignored if the tender output can be met out of the existing
plant capacity of the firm.
 Treatment of Scrap or Wastage
❖ Materials obtained during the course of production or the
residue in the course of manufacture, which are useless for
production are called scrap or wastage.
❖ The scrap materials are sold out and this will reduce the
cost of materials consumed.
❖ This scrap value will be deducted from factory overheads
or from factory costs.
 Treatment of Defective Products
❖ Defective product can be rectified at an extra expenses.
❖ If it is caused by normal reasons, it can be included in
factory costs.
❖ If it is caused by abnormal reasons, it can be transferred to
costing profit and loss account or to a separate Defective
Account.
Meaning and characteristics of cost accounting
Types, advantages and disadvantages of cost accounting
Difference between financial and cost accounting
Meaning and features of unit costing.

APPLIED COST ACCOUNTING

1. Total of direct costs is termed as ________ cost.( Prime )
2. Woks cost is the total of prime cost and ______ overhead.
( factory or works or production)
3.Work-in-progress is adjusted before ascertaining ____________
cost.(works or factory)
4. Finished goods stocks are adjusted after finding cost of _____________.
(Production)
5. Overheads is the total of all ________costs.( indirect)

APPLIED COST ACCOUNTING

6.Depreciation of plant & machinery is a part of _____________ overhead.(
factory)
7. Audit fees is a part of __________overhead. (Administration)

8. Bad debts written off is a part of __________ overhead.( Selling)

9. Warehouse rent is a part of _________ overhead.
( Distribution)
10. Tenders is an (estimation of selling price)

APPLIED COST ACCOUNTING

Able to understand the meaning of production account,
Tender and the treatment of scrap and defective

APPLIED COST ACCOUNTING

⚫Problems in cost sheet

APPLIED COST ACCOUNTING