Unit Costing and Costsheet

Unit Costing

Unit costing is a method of costing based on

units of production.
It is also known as output costing or single
costing.
The output is measured physical units.
Total Cost
Cost per unit
Number of units produced

The cost sheet

prepared under
single or output
costing method
shows the
following:

Total Cost

Cost per
unit

Previous
periods
total cost
and cost per
unit

Procedur
e of Unit
Costing:

Collectio
n of
costs

Cost of
Material
s

Cost of
Labour

Treatment of Stocks
[A.] Stock of Raw Materials

opening of raw materials

Add: Purchase of raw Materials

Rs.
xxxx
xxxx

Less: Closing Stock of raw materials

Cost of raw material consumed

xxxx
xxxx
xxxx

[B.] Treatment of WIP

(a) VALUATION AT PRIME COST
Direct materials
Add: Direct wages
Add: Direct expenses
Add: Opening WIP

Rs.
xxxx
xxxx
xxxx
xxxx

Less: Closing WIP

Prime Cost

xxxx
xxxx
xxxx

(b) VALUATION AT WORK COST

Prime cost
Add: Factory overheads
Add: Opening WIP

Rs.
xxxx
xxxx
xxxx

Less: Closing WIP

Work Cost

xxxx
xxxx
xxxx

[C] Stock of Finished goods

Works costs
Add: Admin and Estblishment OH
Cost of Production
Add: Opening stock of FGs

Less: Closing stock of FGs

Cost of finished gooods sold

Rs
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx

Divisions of Cost

1. Prime Cost: it comprises of all direct

materials, direct labour, and direct expenses.
It is also known as Flat Cost.

2. Work Cost: it is known a factory cost or

cost of manufacture. It is the cost of
manufacturing an article. It includes prime
cost and factory expenses.

Prime cost = Direct Materials + Direct labour +

Direct Expenses

Work cost = Prime Cost + Factory OH

3. Cost of production: it represents factory

costs plus administration expenses.

Cost of production = Factory cost + Admn exp.

4. Total Cost: it is the aggregate of cost of

production plus selling and distribution
expenses.

Total Cost = Cost of production + Selling and Dist.

Exp.

5. Selling price: it is the price which includes

the total cost plus the margin of profit or
minus the margin of loss, if any.

Selling price = Total Cost + Profit/loss