Do we include interest on borrowed funds in cost sheet?

In a cost sheet, interest on borrowed funds is typically not included in the direct costs of production. Instead, it is considered a financial cost or an overhead expense, which may be accounted for separately in financial statements. However, for specific analyses like determining the total cost of capital or in managerial accounting, it might be included to assess overall profitability. It's important to adhere to relevant accounting standards and company policies regarding cost classification.