Effect of Costing Sheet/Overhead on Finanacial Statements

[Former Member]

Hi,

Can any one explain what will be the effect of Costing Sheet on Financial Statement.

Thanks

Sivaram

[former_member188826]

Costing sheet enables transfer of costs from cost center to prodcution orders (or other receiving CO objects) which is internal. By costing sheet alone, no direct impact on FS.

However, when the order carries out the period end activities of settlement, this would affect as balance sheet related inventory accounts gets affected.

[Former Member]

Thanks Sridhar,

Will there any sort of effect on Income Statement as the some of expenses will be added as overhead in inventory..

Thanks

Sivaram

[former_member188826]

When you adding an expense as an overhead in the inventory, you are capitalizing the expses.

If you had charged off the expense and not added to the inventory, the profit would have been reduced.