To determine the selling price of goods produced it is essential to add profit to the cost of saleable goods. Following points should be considered while computing profit: 1. If Percentage of Profit is given on cost then amount of profit will be calculated as follows: It is further assumed that 10% profit has to be earned, then- Profit= (1,25,000 [...]
Following are the methods used to find out the cost of production: 1. Statement of Cost 2. Cost Sheet 3. Tender Statement 4. Production Account. Method # 1. Statement of Cost: Statement of cost is a tabulated statement which shows the production cost of fixed quantity of a product, which is related to the production in a fixed time. Under [...]
In this article we will discuss about the formulas used to determine cost. 1. Calculation of the Cost of Materials Consumed: Raw materials which become part and parcel of the commodity manufactured are known as direct materials. If opening stock of raw materials, purchase of raw materials, loss of raw materials, transfer of raw materials are given, then cost of [...]