How to show per unit cost in manufacturing

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Shagun Bansal (Querist)
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30 September 2018 I manufacturer an item using raw material, electricity,labour . Costing ₹54/kg . Price break up -48+5+1. So how should I show my production in buzy software costing 48 /kg and then take out a sales bill of ₹55/kg or can I show costing ₹54/kg and then take out sales bill of ₹55/kg. Plz help

Kamal Kant Mittal

Kamal Kant Mittal (Expert)
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06 October 2018 Hi,

Please understand the nature of expense first.
Raw Material is a direct cost which will go to your Trading account in layman language and Electricity and Labour charges are in nature of indirect cost and will go to Profit and loss account.
So, in my opinion, You should account Rs. 48 as direct cost, because you cannot divide electricity total expense into expense per unit.

Regards
CA Kamal Kant

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