broad functions of management. Define the three classes of manufacturing costs. Distinguish between product and period costs. Explain the difference between a merchandising and a manufacturing income statement. Indicate how cost of goods manufactured is determined. Explain the difference between a merchandising and a manufacturing balance sheet. Identify trends in managerial accounting. Prepare a worksheet and closing entries for a manufacturing company. Questions 1, 2, 3 Do It! 1 Exercises 1 *2
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available for use | $ 384,000 | | | | Less: Raw material inventory, July 31 | $ 34,000 | | | | Direct material used | | $ 350,000 | | | Direct Labor | | $ 250,000 | | | Manufacturing overhead | | $ 150,000 | | | Total Manufacturing cost | | | $ 750,000 | | Total cost of work in process | | | $ 775,000 | | Less: Work in process, July 31 | | | $ 43,000 | | Cost of Good Manufactured | | | $ 732,000 | | | | | | | Cost
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Cost of Goods purchased Cost of raw material available for use Less: Raw material inventory, Ending Cost of raw material used/consumed Add: Direct Labor Prime Cost Add: Factory Overhead: Indirect Material Indirect Labor Other indirect expenses Total manufacturing cost Add: Beginning W-I-P Cost of input put into the process Less: Ending W-I-P Cost of good manufactured Add: Beginning finished goods inventory Cost of goods available
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arrange for shipping the orders via Federal Express, Canada Post and other freight carriers. The company is unsure how to classify your annual salary in its cost records. The company’s cost analyst says that your salary should be classified as a manufacturing (product) cost; the controller says it should be classified as a selling expense; the president says that it does not matter how your salary cost is classified. Required: Explain the effects of using each of the cost classifications recommended
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labor + Manufacturing overhead = Total manufacturing costs - Work in process inventory, ending = Cost of goods manufactured Cost of Goods Sold Finished goods inventory, beginning + Cost of goods manufactured = Cost of goods available for sale - Finished goods inventory, ending = Cost of goods sold Sales - Cost of goods sold = Gross Margin Predetermined Overhead Rate Estimated manufacturing overhead/Estimated machine hours= $ per machine hour Calculate applied overhead Actual
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Assignment 3: Calculating Inventory Finlon Upholstery Inc. uses a job-order costing system to accumulate manufacturing costs. The company's work-in-process on December 31, 2001, consisted of one job (no. 2077), which was carried on the year-end balance sheet at $156,800. There was no finished-goods inventory on this date. Finlon applies manufacturing overhead to production on the basis of direct-labor cost. (The budgeted direct-labor cost is the company's practical capacity, in terms of direct-labor
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always been a competitive force in the pump manufacturing industry, but lately their profits have dropped to an unacceptable level. The drop in profits has forced management to take a look at several possible solutions, including their accounting methods. Historically, Wilkerson has relied on the traditional costing method of accounting meaning that they have allocated overhead as a percentage of the labor hour costs to each of the three products. The overhead costs are currently set at 300% of the production-run
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M17-16 a. Process. A continuous manufacturing process. b. Process. A continuous manufacturing process (may be job order if processed in batches for specific customers). c. Job order. Ordinarily manufactured in batches for particular combinations of size, style and color. If batches are very large, process costing could be used. d. Job order. Ordinarily manufactured one at a time, but modern technology permits some mass producing of modular homes; this could permit process costing
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Chapter 16: Cost concepts, Cost behaviour and CVP Analysis Organisational Framework • Organisations can be classified into one of three categories: 1) Manufacturing: produce goods by converting raw materials into a physical product through the use of labour and capital inputs. Usually sell G to merchandising or other manufacturing firms 2) Merchandising: Buy goods already made and then sell them to consumers or other merchandising firms. Selling directly to consumers (retailers) selling to
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computerized manufacturing system will have deep impact on manufacturing processes and costing. The new system may affect the manufacturing processes by slowing them down like Anh Tran is afraid. As it requires training and reorganizing and will take time for employees to fully get used to it, the production line will be delayed and might not reach the budgeted target. The manufacturing costs will certainly increase as depreciation cost of the new machine will be included in the manufacturing costs. Therefore
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