Difference between cost sheet and production statement
Cost sheet is a statement in which the details of expenses incurred on a particular product or job, during a specific period are presented. It is not exactly same as production account, which is nothing but an extended version of the statement of cost. While cost sheet can be prepared, as many times as the management of the company desires, production account can only be prepared, after the completion of the manufacturing process. Key Differences Between Cost Sheet and Production Account Cost Sheet is a document in which all the cost incurred by a company in the production of a product, during a particular period is recorded. As opposed, an account, which combines the features of the cost sheet and the trading and profit and loss account, is known as Production account. Cost Sheet is prepared in the form of a statement, whereas Production Account is a T-shaped ledger account. Cost Sheet is used to show the details of the production of a particular period. Conversely, Production Account indicates the cost of any process, contract or services provided, in individual accounts. Cost Sheet is prepared before the beginning of the production process. Unlike Production account which is prepared after the completion of the production process. The cost sheet is helpful in making a comparison of two different periods, whereas one cannot make a comparison of two periods, with the help of production account. Cost sheet is prepared on the basis of actual or estimated figures. In contrast, the production account is based on actual figures only. As cost sheet is nothing but a memorandum statement, it is not prepared as per double entry system of bookkeeping. On the other hand, production account is prepared according to the rules of double entry system. In cost sheet, the expenses are classified under various heads, to calculate the prime cost, factory cost and total cost. As against this, there is no classification of expenses in production account. In the submission of tenders, cost sheet is helpful in the preparation of cost estimate. On the flip side, production account does not play any role in the submission of tenders and quotations.