What do you mean by Cost Sheet? State its advantages.

Cost Sheet is statement designed to show the output of a particular accounting period along with break-up of costs. The data incorporated in cost sheet are collected from various statements of accounts which have been written in cost accounts, either day to day or in regular records. There is no fixed form for the preparation of cost sheet, but in order to make the cost sheet more useful, it is generally presented in columns form. Advantages of the cost sheet (i) It discloses the total cost & the cost per unit of the units produced during a given period. (ii) It enables a manufacturer to keep a close watch & control over the cost of production. (iii) By providing a comparative study of the various elements of current cost with the past results & standard costs, it is possible to find out the causes of variations in costs & to eliminate the adverse factors & conditions which increase the total cost. (iv) It acts as a guide to the manufacturer & helps him in formulating a definite useful production policy. (v) It helps in fixing up the selling price more accurately. (vi) It helps businessmen to minimize the cost of production when there is a cut throat competition. (vii) It helps businessmen to submit quotations with reasonable degree of accuracy against tenders for the supply of goods.