Production Account

In operation costing topic of cost accounting, if we have to show stock of finished goods, sale and net profit, then for this we have to make a account. That account will be production account. This production account is developed from of cost sheet. This account can be made in two column form in which we can show per unit cost and total cost of production.

Production account can be made according to the need of management It is real account and it is also mixture of cost sheet and trading and profit and loss account.  It has four parts. First part shows prime cost, second part shows cost of goods manufactured, third part shows gross profit and last and final part shows net profit.

Its proforma is given below: