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Bank Charges in cost sheet

GURLEEN KAUR (accountant, GST) (45 Points)

12 May 2021

While Calculating Cost of Production should i consider bank charges and advertisement. if yes then how?? plz advice

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5 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24588 Points)
Replied 12 May 2021

No bank charges and advertisement are not considered in cost sheet

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CMA Poornima Madhava (CMA) (13112 Points)
Replied 12 May 2021

1) Bank charges related to office administration can form part of admin overheads and thus in cost of production

2) Advertisement is part of selling & distribution overhead and thus not part of cost of production but of cost of sales

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CA. Sourav Sarkar (Chartered Accountant ) (24588 Points)
Replied 12 May 2021

Yes agree with poornima it was a mistake

sabyasachi mukherjee (27781 Points)
Replied 13 May 2021

Advertisement cost is added after cost of production.
So it forms a part of selling and distribution overhead.
It is always apportioned on the basis of sales hence forms part of cost of sales.
Bank charges is an overhead but forms finance cost.
So an indirect overhead of administration overhead.

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