Copst of production under CAS-4

[Asked by Guest]

Dear Sir,

Can any one explain me when we calculate the cost of production under CAS-4 if our factory running at 50% of Capacity utilization can we consider 50% of Overhead for calculation of Cost of production?

Regards

Swapneswar Muduli

[Rajagopalan Ranganathan]

Sir,

In my opinion you have put this question to a practicing xost accountant and not raise the same in this forum.

[YAGAY and SUN]

Dear Swapneswar,

Please refer CAS-4 Guidance Note (revised) dated 24-01-2012 issued by THE INSTITUTE OF COST AND WORKS ACCOUNTANTS OF INDIA or take help of Cost Accountant in this regard.

Regards,

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

[Mahir S]

Sir, in my opinion, in your case, you can not consider 50% of Overhead for calculation of Cost of production.

AI Summary

Cost of production under CAS-4: follow CAS guidance and obtain qualified cost accountant advice on overhead allocation.
Allocation of overheads for cost of production under CAS-4 must follow the CAS-4 Guidance Note and the judgment of a qualified cost accountant; mechanical pro rata reductions based solely on current capacity utilisation are not to be adopted without confirming conformity with CAS-4 allocation methodology and supporting records.