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CAS4
COST ACCOUNTING STANDARD ON
COST OF PRODUCTION FOR CAPTIVE CONSUMPTION
The following is the text of the COST ACCOUNTING STANDARD 4 (CAS4) issued by the
Council of the Institute of Cost and Works
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How to fill out cost of production for
01
To fill out the cost of production, follow these steps:
02
Start by gathering all the necessary information about your production process, such as the cost of raw materials, labor expenses, and overhead costs.
03
Calculate the direct costs of your production, which include the cost of raw materials and direct labor. Add these costs together.
04
Determine the indirect costs, also known as overhead costs, which are not directly tied to the production process but still need to be allocated. These may include rent, utilities, and administrative expenses.
05
Allocate the indirect costs to your production by using a suitable allocation method, such as allocating based on the direct labor hours or the total cost of production.
06
Add the direct costs and the allocated indirect costs together to get the total cost of production.
07
Double-check your calculations and ensure all relevant costs are included.
08
Fill out the cost of production form or spreadsheet, entering the calculated values for each cost category.
09
Review the completed form to make sure it is accurate and comprehensive.
10
Keep a copy of the filled-out cost of production form for your records.
Who needs cost of production for?
01
There are several groups of people and organizations that may need the cost of production information:
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- Business owners and managers: They need cost of production data to evaluate the profitability of their operations, make pricing decisions, and identify areas for cost reduction.
03
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- Government agencies: They may require cost of production information for regulatory purposes, such as taxation or economic policy planning.
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- Suppliers and vendors: They may request cost of production information from their customers to negotiate prices or assess the stability of business relationships.
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What is cost of production for?
Cost of production is for calculating the total expenses incurred in manufacturing a product or providing a service.
Who is required to file cost of production for?
Businesses or organizations that engage in manufacturing or providing services are required to file cost of production.
How to fill out cost of production for?
Cost of production can be filled out by documenting all expenses related to the production process, including raw materials, labor, overhead costs, etc.
What is the purpose of cost of production for?
The purpose of cost of production is to analyze and monitor the expenses involved in production, to determine profitability and make informed business decisions.
What information must be reported on cost of production for?
Information such as raw material costs, labor costs, overhead costs, production quantities, and any other expenses related to production must be reported on cost of production.
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