What are the advantages of cost sheet?

The main purposes or advantages of cost sheet are:

  • It discloses the total cost and the cost per unit of the units produced during the given period.


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  • It enables a manufacture to keep a close watch and control over the cost of production.
  • By providing a comparative study of the various elements of current cost with the past results and standard costs, it is possible to find out causes of variation in costs and to eliminate the adverse factors and conditions which go to increase the total cost.
  • It acts as guide to the manufacturer and helps him in formulating a definite useful production policy.
  • It helps in fixing up the selling price more accurately.
  • It helps the businessman to minimize the cost of production when there is a cut throat competition.
  • It helps the businessman to submit quotations with reasonable degree of accuracy against tenders for the supply of goods.
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