INVENTORY Accounting ASW Summer 2007 Manufacturing Accounting Manufacturing
- Slides: 15
INVENTORY Accounting ASW Summer 2007
Manufacturing Accounting • Manufacturing accounting – what if you make inventory rather than buying? – how do we value inventory/CGS for a manufacturing firm? – should include all costs of acquiring the product and making it ready for sale
Overview of Manufacturing Firm • Period costs - Selling, general and administrative, etc. • Production costs
Period Costs • Examples - corporate headquarters - marketing, advertising - finance, interest - research and development • Generate period costs charged to expense - just as in a merchandising firm
Product Costs • Identify all relevant costs of “acquiring” – Direct labor • labor costs which can be linked to specific product • typically costs of employees working directly on that product • assigned based on actual labor used
• Direct materials – materials costs which can be linked to products – typically major components of the product – assigned based on actual materials used
• Overhead--can’t be linked to products – indirect labor • e. g. , janitorial, supervisor – indirect materials • e. g. , supplies, small components – overhead • e. g. , depr. , rent, utilities on production facilities – allocate based on “drivers” • e. g. , direct labor, direct materials
Are these product or period costs? Cutting-machine operator Factory janitor Factory payroll clerks Factory superintendent General office secretary Guards at the factory gate Inspectors in a factory Factory maintenance workers Factory security guards General office clerks President of the firm Sales manager Raw materials receiving room workers Sweepers who clean a retail store Traveling salespersons
Physical flow • Raw materials into warehouse • Materials and labor on plant floor • Finished product to warehouse • Shipped out when sold
Cost allocation • Cost of materials inputs into raw material inventory when acquired • Cost of materials, labor & overhead into work in process inventory as produced • Total cost incurred into finished goods inventory when completed • Total cost into cost of goods sold at sale
- Asw accounting
- Asw 224
- Asw 228
- Asw 224
- Asw 1
- Asw-292
- Kjsd.powerschool.com/student
- Bbs lcsw forms
- Geographic literacy survey
- Suppose dave's discount merchandise inventory
- Manufacturing cost vs non manufacturing cost
- Process costing vs job costing
- Controllable costs
- Manufacturing cost vs non manufacturing cost
- Additively
- Inventory valuation grade 12 notes