Q.State, in order, the basic components (cost totals) that a Cost Sheet builds up to, from Direct Material Consumed to Sales.

A Cost Sheet is a fixed sequence of seven stages, each one built on top of the previous one by adding exactly one more cost head or stock adjustment.

Starting from Direct Material Consumed, Direct Wages, and Direct Expenses (which together give Prime Cost), the Cost Sheet adds Factory Overhead (adjusted for WIP) to reach Factory Cost, then Office & Administration Overhead to reach Cost of Production, then adjusts for Finished Goods stock to …

A Cost Sheet builds up total cost in a FIXED sequence of stages, with exactly one cost head or stock adjustment added (or adjusted) at each step:

1. Direct Material Consumed (= Opening Stock + Purchases − Closing Stock of Raw Material) + Direct Wages + Direct Expenses = PRIME COST
2. Prime Cost + Factory (Works) Overhead + Opening Work-in-Progress − Closing Work-in-Progress = FACTORY COST (WORKS COST)
3. Factory Cost + Office & Administration Overhead = COST OF PRODUCTION
4. Cost of Production + Opening Stock of Finished Goods − Closing Stock of Finished Goods = COST OF GOODS SOLD
5. Cost of Goods Sold + Selling & Distribution Overhead = COST OF SALES
6. Cost of Sales + Profit (or − Loss) = SALES …

A common recall error is naming 'Cost of Production' and 'Cost of Sales' as if they were the same stage, or skipping the 'Cost of Goods Sold' stage entirely and adding Selling & Distribution Overhead directly to Cost of Production — this only happens to give the right numerical answer when opening and closing Finished Goods stock are equal; …