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Cost Sheet: Prime Cost (A+b+c)

The document outlines the steps to calculate various production and inventory costs. It first lists the components to calculate prime cost including materials consumed, direct labor, and direct expenses. It then lists the subsequent stages to calculate factory cost, production cost, cost of goods produced and sold, and finally sales. The second part defines formulas to calculate reorder levels, maximum and minimum stock levels, and average stock level to manage inventory control.

Uploaded by

Nishant Singh
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
22 views

Cost Sheet: Prime Cost (A+b+c)

The document outlines the steps to calculate various production and inventory costs. It first lists the components to calculate prime cost including materials consumed, direct labor, and direct expenses. It then lists the subsequent stages to calculate factory cost, production cost, cost of goods produced and sold, and finally sales. The second part defines formulas to calculate reorder levels, maximum and minimum stock levels, and average stock level to manage inventory control.

Uploaded by

Nishant Singh
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Cost Sheet

Op. STOCK (Raw material) + Purchases (Incl. freight I/W) -Clo. Stock (Raw material) = Materials Consumed (a) Direct Labour (b) Direct Expenses (c) Prime Cost (a+b+c) + Factory overheads (net of scrap) + Op. Stock (WIP)

Clo. Stock (WIP)


Factory or Works Cost + Administration overheads Production cost of Goods Produced + Op. stock of finished goods - Clo.stock of finished goods Cost of Prodn. of goods Sold +Selling & Distribn. Overheads Cost of Sales + Profit Sales (Net of taxes)

Inventory Control - Formulaes


Reorder Level = Maximum Reorder period * Maximum usage Or Reorder Level = Minimum Level + Consumption during the time to get fresh delivery Maximum Stock Level = Reorder Level + Reorder Quantity (Minimum usage * Minimum reorder period) Minimum Stock Level = Reorder Level (Normal Consumption * Normal Reorder period) Average Stock level = *(Maximum Stock level + Minimum Stock Level ) Or Average Stock level = Minimum Stock level + of Re-order Quantity

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