Accounting for Manufacturing Operations

Accounting for Manufacturing Operations.

Business Organizations. NATURE. Service concern Merchandising Manufacturing Hybrid.

Movement of Finished Goods. Manufacturers. Consumers or final users.

Manufacturing Inventories. Raw Materials Work in Process Finished Goods.

Manufacturing Inventories. 1) Raw Materials – unprocessed, unrefined - being in or nearly in the natural state.

1) Raw Materials – unprocessed, unrefined. - being in or nearly in the natural state.

3 Cost Elements. Manufacturing Inventories. Direct Materials Direct Labor Manufacturing Overhead Total Manufacturing Cost.

Company ABC. XYZ Company.

Direct Materials are those materials and supplies that are consumed during the manufacture of a product, and which are DIRECTLY identified with that product..

Flow of Inventories. Raw Materials Work in Process Finished Goods Purchases Requisitioned to Direct materials Completed Cost of Cost of production: Direct labor units Goods Goods *direct Overhead Manufactured Sold *indirect.

MERCHANDISING. Net Sales XX. INCOME STATEMENTS. SERVICE CONCERN.

MANUFACTURING Finished Goods, beginning xx Add: Cost of Goods Manufactured xx Cost of Goods Available for Sale xx Less: Finished Goods, end xx COST OF GOODS SOLD xx.

to close = is to bring the account balance to ZERO = only temporary / nominal accounts.

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