# Cost Sheet: Introduction & Format
## What is a Cost Sheet?
A Cost Sheet (or Cost Statement) is a document which provides detailed cost information. Cost information is usually presented on the basis of functional classification, though other classifications may be adopted to suit users' needs.
## The Four Cost Heads
Costs grouped by function flow through four cumulative cost heads:
```
Prime Cost → Cost of Production → Cost of Goods Sold → Cost of Sales
```
## Standard Cost Sheet Format
| # | Particulars | Working |
|---|---|---|
| 01 | Opening Stock of Raw Materials | XXX |
| 02 | Add: Purchase of Raw Material | XXX |
| 03 | Less: Closing Stock of Raw Material | (XXX) |
| 04 | Direct Material Consumed | (1 + 2 − 3) |
| 05 | Direct Labour | XXX |
| 06 | Direct Expenses | XXX |
| 07 | PRIME COST | (4 + 5 + 6) |
| 08 | Add: Production Overheads | XXX |
| 09 | Gross Works Cost | (7 + 8) |
| 10 | Add: Opening Work in Progress | XXX |
| 11 | Less: Closing Work in Progress | (XXX) |
| 12 | Factory Cost | (9 + 10 − 11) |
| 13 | Add: Quality Control Cost | XXX |
| 14 | Add: Research & Development | XXX |
| 15 | Add: Administrative OH (Related to Production) | XXX |
| 16 | Add: Primary Packing Cost | XXX |
| 17 | Less: Credit for Recovery / Scrap Income | (XXX) |
| 18 | COST OF PRODUCTION (COP) | (12+13+14+15+16−17) |
| 19 | Add: Opening Finished Goods | XXX |
| 20 | Less: Closing Finished Goods | (XXX) |
| 21 | COST OF GOODS SOLD (COGS) | (18 + 19 − 20) |
| 22 | Add: Administrative OH (General) | XXX |
| 23 | Add: Selling Overheads | XXX |
| 24 | COST OF SALES (COS) | (21 + 22 + 23) |
| 25 | Add: Profit | XXX |
| 26 | Sales | XXX |
## Key Relationships to Memorise
- Prime Cost = Direct Material + Direct Labour + Direct Expenses
- Factory/Works Cost = Gross Works Cost ± WIP adjustment
- Cost of Sales + Profit = Sales
- Conversion Cost = Direct Labour + Direct Expenses + Production Overheads
> Note the two different Administrative Overheads: those related to production are added before COP (row 15); general admin OH is added after COGS (row 22).