Cost sheet is a statement wherein detailed information about costs is depicted and a total cost of product manufactured during a particular period of time is ascertained. The cost sheet is prepared for a particular period, e.g. monthly, quarterly etc.
The cost sheet is prepared with the following objectives:
(i) It ascertains the total cost and cost per unit for a particular period.
(ii) It enables the management to fix up sale price of products.
(iii) It helps to present a comparative study of current costs with the costs of the corresponding period.
(iv) The management can identify the causes of inefficiencies and wastages and can take corrective measures.
(v) It provides management with suitable information for management control.
(vi) It also helps the management considerably in formulating suitable and definite production policy.
(vii) Cost sheet enables the businessman to submit quotation against tenders.