This document provides an overview of key concepts for updating a reviewer on cost accounting for a manufacturing concern. It defines direct materials, conversion costs including direct labor and factory overhead, and three types of inventory. It also outlines the four main financial statements for a manufacturing concern and provides examples of journal entries for a statement of cost of goods manufactured and a statement of comprehensive income.
This document provides an overview of key concepts for updating a reviewer on cost accounting for a manufacturing concern. It defines direct materials, conversion costs including direct labor and factory overhead, and three types of inventory. It also outlines the four main financial statements for a manufacturing concern and provides examples of journal entries for a statement of cost of goods manufactured and a statement of comprehensive income.
This document provides an overview of key concepts for updating a reviewer on cost accounting for a manufacturing concern. It defines direct materials, conversion costs including direct labor and factory overhead, and three types of inventory. It also outlines the four main financial statements for a manufacturing concern and provides examples of journal entries for a statement of cost of goods manufactured and a statement of comprehensive income.
This document provides an overview of key concepts for updating a reviewer on cost accounting for a manufacturing concern. It defines direct materials, conversion costs including direct labor and factory overhead, and three types of inventory. It also outlines the four main financial statements for a manufacturing concern and provides examples of journal entries for a statement of cost of goods manufactured and a statement of comprehensive income.
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UPDATE REVIEWER FOR COST ACCOUNTING
MOD8: Manufacturing (mainly FS)
Merchandise, finished products bought, finished goods to be sold (no alterations)
Manufacture, also engages in buy and sell but here, raw materials are bought, then finished goods are to be sold (there’s alterations)
Direct Materials- obvious material of a product, composing majority of product (Raw Material Net Purchases, Raw Material Inventory End, Requisition of Materials)
CONVERSION COST Direct Labor
Factory Overhead Indirect Labor Indirect Materials- varnish, paint, sandpaper, not too obvious component of product Machinery Depreciation Maintenance Factory Building- could have a given percentage, what portion is the building solely used for manufacturing, if not given then building is assumed as manufacturing concern
Requisition of Materials (Direct/Indirect)
3 TYPES OF INVENTORY(assets) Raw Materials Inventory- unused wood Goods in Process Inventory- partially completed Finished Goods- leftover successful goods, weren’t sold
4 Financial Statements: Cost of Goods Manufactured Comprehensive Income (FOE/NOE) Financial Position (account form, single...) Changes In Equity
SCGM SCI (FOE) SCE SFP
This part is similar to NET SALES (cr) NET INVESTMENT Take Note of unique Trading, as CGS Difference between Difference between account names... Sales &(sum of SRA Capital, beg & Current Asset GROSS Purchases and SD) Drawing accounts: (applying (dr) amortized cost) Sum of Raw TOTAL GOODS CAPITAL, END -Finished Goods UPDATE REVIEWER FOR COST ACCOUNTING
Materials Purchases AVAILABLE FOR If: Inventory, End (dr)
and Freight In SALE (dr) (a) Net Profit, add the -Goods in Process Sum of amount to Net Inventory, End (dr) NET PURCHASES Finished Goods, Investment -Raw Materials Difference between Invtry, beg and Cost (b) Net Loss, use the Inventory, End (dr) Gross Purchases & of Goods amount to deduct Net -Factory Supplies (sum of PRA and PD) Manufactured Investment Non-Current Assets: Total RM available CGS (dr) (applying carrying for use Difference between amounts) sum of Raw Materials Total Goods -Building Beg. Inventory and Available for Sale & -Machinery Total Raw Materials Finished Goods, Available For Used) Invtry, end (cr)
DMU/RAW GROSS MATERIALS PROFIT/MARGIN USED/Requisitioned/ ON SALES (cr) (dr) -Difference between Sales & CGS Get the Difference between Total RM -Given Markup, available for use & finding the quotient Raw Materials instantly lead to your Inventory, end CGS, then apply what …. was said in 1st bullet DIRECT LABOR to get GP (dr) -Given Percentage, FACTORY HEAD portion of which is (dr) identified as Profit, Sum of then you can find the Indirect Labor, CGS by getting the Indirect Materials and difference between other Factory related- Sales and GP expenses (heat light and power, factory OPERATING supplies, factory EXPENSES (dr) insurance, -the same w trading, depreciation- as expenses in machinery, factory making the finished maintenance, misc) products are transferred into TOTAL forming CGM MANUFACTURING EXPENSES/COST -Categorizing UPDATE REVIEWER FOR COST ACCOUNTING
(dr) expenses to Sum of Direct Labor, Selling/Distribution DMU and Expense of General & Factory Head Administrative Expense
TOTAL GOODS -Req. To Note
PLACED IN NET INCOME FOR PROCESS (dr) THE PERIOD (cr) Sum of Difference between Total Manufacturing Gross Profit on Sales Expenses and & Operating Work/Goods in Expenses Process, beg
COST OF GOODS MANUFACTURED (dr) Difference between Total Goods Placed in Progress & Work/Goods in process, end(cr)
PRIME COST (dr)
- Sum of Direct Materials used and Direct Labor
CONVERSION COST -Sum of Direct Labor and Factory Overhead UPDATE REVIEWER FOR COST ACCOUNTING
Example of MANUFACTURING SCI-NOE
ELEMENTS IN A SCI-NOE
Total Operating Revenue (Excludes CGS)
TOTAL OPERATING INCOME BREAKDOWN… Net Sales Other Sources of Income
Total Operating Expense (Includes CGS)
TOTAL OPERATING EXPENSE BREAKDOWN… *CGM & Net Change in Finished Goods Inventory are contributing elements that leads to your CGS expense
CGM (similar to Net Purchases)
Net Change in Finished Goods Inventory Other Expenses
**Interest Expense is always separated from Total Operating Expense
UPDATE REVIEWER FOR COST ACCOUNTING
COVERAGE 1. Special Journals, only procedural (with this transaction which type of special journal should you record it; posting to general ledger & subsidiary ledger) 2. Manufacturing concern- FS 3. Other Topics
