Difference Between Cost Sheet and Production Account

1. Cost sheet is made just for showing total cost of production but production account is just like trading and profit and loss account and it shows total cost and total net profit from producing specific units of production.

2. Production Account follows the rules of   double entry system but cost sheet does not follow the rules of double entry system.

3.  Production Account has four parts two. The first part shows prime cost, second part shows cost of goods manufacturing, third part shows gross profit and fourth part shows net profit. Cost Sheet presents the elements of costs in a classified manner and the cost ascertained at different states such as prime cost; works cost; cost of production; cost of goods sold; cost of sales and total cost.

4. With the help of  Production Account, we can not prepare  tenders or quotations because it shows historical detail regarding production of units. But estimated cost sheets can be prepared on the basis of actual cost sheets and these are useful for preparing tenders or quotations.

5. Difference between cost sheet and production account as per ICAI ref. pdf file