Cost sheet

Thank you :)

Thread Starter

Sushmita Chowdhury

CA Inter

★ 2K+

23-Mar-25 14:42

The cost sheet is prepared for a single year. While the life of the mould and patterns is 2 years so it is amortized over a period of 2 years 896000/2=448000

Jai Adithya

CA Inter

★ 14K+

23-Mar-25 01:39

It is direct expense

Thread Starter

Sushmita Chowdhury

CA Inter

★ 2K+

23-Mar-25 07:20

Moulds are attached to the product

Thread Starter

Sushmita Chowdhury

CA Inter

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23-Mar-25 07:20

How to allocate factory expense and direct expense ?

Thread Starter

Sushmita Chowdhury

CA Inter

★ 2K+

23-Mar-25 07:28

Direct expense are those which can traced in a economically feasible manner to a product. Mould are like structures which gives shape to the product, it is treated as a direct expense as it is very well utilised in making the product and has a direct influence and is directly traceable. Usually the cost of mould will be spread over the budgeted units that are capable of being produced through that mould but in this question there is no details about budgeted units so it is amortized over two years, hence it is amortized over time than units produced. It's not a factory overhead like rent or depreciation where we cannot directly point out how much of this expense are directly related to the product.

Jai Adithya

CA Inter

★ 14K+

23-Mar-25 11:01

Crap ! i want to click it as best answer n by mistake diff option 🤦‍♀️

Thread Starter

Sushmita Chowdhury

CA Inter

★ 2K+

23-Mar-25 14:44

idk how to rectify

Thread Starter

Sushmita Chowdhury

CA Inter

★ 2K+

23-Mar-25 14:45

No probs :)

Jai Adithya

CA Inter

★ 14K+

23-Mar-25 15:15