Académique Documents
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Lecture # 3
REQUIREMENT IN COST
ACCOUNTING
A Manufacturing A/C Is
Prepared In Addition To
The Trading And Income
Statement Accounts
COMPARING MERCHANDISING AND
MANUFACTURING ACTIVITIES
Merchandisers . . . Manufacturers . . .
Buy finished Buy raw
goods. materials.
Sell finished Produce and sell
goods. finished goods.
MegaLoMart
MANUFACTURING COST CONCEPTS
Financial
Accounting Managerial
Cost is a measure of Accounting
resources used or Product costs are the
given up to achieve a costs a company
stated purpose. assigns to units
produced.
MANAGERIAL
COST CONCEPTS
Merchandiser
Beginning Ending
Merchandise + Cost of Goods - Merchandise =
Inventory Purchased Inventory
Manufacturer Cost of
Goods Sold
Beginning Ending
Finished Goods + Cost of Goods - Finished Goods =
Manufactured
Inventory Inventory
INVENTORIES
Merchandiser Manufacturer
Current assets:
Current assets:
Cash
Cash Accounts receivable
Accounts receivable Inventories:
Finished goods
Merchandise Work in process
inventory
Materials
PRODUCT COSTS
Period Costs
Selling Expenses
Nonmanufacturing
Costs Administrative
Expenses
NONMANUFACTURING COSTS
Direct materials:
Beginning Materials inventory xxx
Purchases xxx
less purchases returns and allowances xxx xxx
Materials available for use xxx
less ending materials inventory xxx
direct materials consumed xxx
Direct labor xxx
Factory overhead
Indirect labor xxx
Salaries xxx
Payroll taxes xxx
Power xxx
Heat xxx
Light xxx
Factory supplies xxx
Depreciation-factory building xxx
Depreciation – machinery xxx
Repairs and maintenance xxx
Patent xxx
Tools and dies used xxx
Insurance xxx
Total factory overhead cost xxx
Total manufacturing cost
xxx
Total manufacturing cost xxx
Add beginning work in process inventory xxx
xxx
less ending work in process inventory xxx
Cost of goods manufactured xxx
Add beginning finished goods inventory xxx
Cost of goods available for sale xxx
less ending finished goods inventory xxx
Cost of goods sold xxx
STATEMENT OF COST OF GOODS SOLD