Description
The presentation describes the accounting for product cost flow and manufacturing cost.
ACCOUNTING FOR COSTS
Schedule of Cost of Goods Manufactured
Calculates the cost of raw material, direct labor and manufacturing overhead used in production.
Calculates the manufacturing costs associated with goods that were finished during the period.
Product Cost Flows
Raw Materials
Beginning raw materials inventory Raw materials purchased Raw materials available for use in production Ending raw materials inventory Raw materials used in production
Manufacturing Costs
Direct materials
Work In Process
+ =
– =
As items are removed from raw materials inventory and placed into the production process, they are called direct materials.
Product Cost Flows
Raw Materials
Beginning raw materials inventory Raw materials purchased Raw materials available for use in production Ending raw materials inventory Raw materials used in production
Manufacturing Costs
Direct materials + Direct labor + Mfg. overhead = Total manufacturing costs
Work In Process
+ =
– =
Conversion costs are costs incurred to convert the direct material into a finished product.
Product Cost Flows
Raw Materials
Beginning raw materials inventory Raw materials purchased Raw materials available for use in production Ending raw materials inventory Raw materials used in production
Manufacturing Costs
Direct materials + Direct labor + Mfg. overhead = Total manufacturing costs
Work In Process
Beginning work in process inventory + Total manufacturing costs = Total work in process for the period
+ =
– =
All manufacturing costs incurred during the period are added to the beginning balance of work in process.
Product Cost Flows
Raw Materials
Beginning raw materials inventory + Raw materials purchased = Raw materials available for use in production
Manufacturing Costs
Direct materials + Direct labor + Mfg. overhead = Total manufacturing costs
Work In Process
Beginning work in process inventory Total manufacturing costs Total work in process for the period Ending work in process inventory Cost of goods manufactured
+ =
–
Costs associated with the goods that are completed during the period are transferred to finished goods inventory.
=
Product Cost Flows
Work In Process
Beginning work in process inventory Manufacturing costs for the period Total work in process for the period Ending work in process inventory Cost of goods manufactured
Finished Goods
Beginning finished goods inventory + Cost of goods manufactured = Cost of goods available for sale - Ending finished goods inventory Cost of goods sold
+ = – =
Manufacturing Cost Flows
Costs
Material Purchases Direct Labor Manufacturing Overhead
Balance Sheet Inventories
Raw Materials Work in Process
Income Statement Expenses
Finished Goods
Cost of Goods Sold
Selling and Administrative
7-8
Selling and Administrative
Period Costs
doc_692802716.ppt
The presentation describes the accounting for product cost flow and manufacturing cost.
ACCOUNTING FOR COSTS
Schedule of Cost of Goods Manufactured
Calculates the cost of raw material, direct labor and manufacturing overhead used in production.
Calculates the manufacturing costs associated with goods that were finished during the period.
Product Cost Flows
Raw Materials
Beginning raw materials inventory Raw materials purchased Raw materials available for use in production Ending raw materials inventory Raw materials used in production
Manufacturing Costs
Direct materials
Work In Process
+ =
– =
As items are removed from raw materials inventory and placed into the production process, they are called direct materials.
Product Cost Flows
Raw Materials
Beginning raw materials inventory Raw materials purchased Raw materials available for use in production Ending raw materials inventory Raw materials used in production
Manufacturing Costs
Direct materials + Direct labor + Mfg. overhead = Total manufacturing costs
Work In Process
+ =
– =
Conversion costs are costs incurred to convert the direct material into a finished product.
Product Cost Flows
Raw Materials
Beginning raw materials inventory Raw materials purchased Raw materials available for use in production Ending raw materials inventory Raw materials used in production
Manufacturing Costs
Direct materials + Direct labor + Mfg. overhead = Total manufacturing costs
Work In Process
Beginning work in process inventory + Total manufacturing costs = Total work in process for the period
+ =
– =
All manufacturing costs incurred during the period are added to the beginning balance of work in process.
Product Cost Flows
Raw Materials
Beginning raw materials inventory + Raw materials purchased = Raw materials available for use in production
Manufacturing Costs
Direct materials + Direct labor + Mfg. overhead = Total manufacturing costs
Work In Process
Beginning work in process inventory Total manufacturing costs Total work in process for the period Ending work in process inventory Cost of goods manufactured
+ =
–
Costs associated with the goods that are completed during the period are transferred to finished goods inventory.
=
Product Cost Flows
Work In Process
Beginning work in process inventory Manufacturing costs for the period Total work in process for the period Ending work in process inventory Cost of goods manufactured
Finished Goods
Beginning finished goods inventory + Cost of goods manufactured = Cost of goods available for sale - Ending finished goods inventory Cost of goods sold
+ = – =
Manufacturing Cost Flows
Costs
Material Purchases Direct Labor Manufacturing Overhead
Balance Sheet Inventories
Raw Materials Work in Process
Income Statement Expenses
Finished Goods
Cost of Goods Sold
Selling and Administrative
7-8
Selling and Administrative
Period Costs
doc_692802716.ppt