GOALS BUSINESS MATH© Thomson/South-WesternLesson 11.1Slide 1 11.1Manufacturing Costs Calculate prime cost and total manufacturing costs Distribute factory.

Slides:

Advertisements

Similar presentations

Schedule of Cost of Goods Manufactured

Advertisements

 prepared by those organisations  that manufacture goods.  they prepare another account called  the manufacturing account  in addition to the trading,

Manufacturing Account

... Overhead oo Works overhead Distribution overhead Administration overhead Indirect labour Indirect expenses Indirect material Selling overhead Administration.

Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12 th Edition, © Pearson Education Limited 2012 Slide 37.1 Chapter 37 Manufacturing accounts.

18 Managerial Accounting Concepts and Principles

Financial Accounting 1 Lecture – 33 Question Following trial balance has been extracted from the books of Javed Furniture Manufacturers on June 30, 2002.

McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 7 Departmentalizing Overhead Costs.

GOALS BUSINESS MATH© Thomson/South-WesternLesson 11.2Slide Break-Even Point Calculate the break-even point for a product in units Calculate the break-even.

OVERHEAD ANALYSIS Objectives of Cost Accounting: To calculate the cost of any work-in-progress To attempt to control costs by comparing actual with estimated.

COST SHEET Samir K Mahajan. COMPONENTS OF TOTAL COST  Prime cost or Direct cost : It is the aggregate of direct material cost, direct labour cost and.

Copyright © 2006, The McGraw-Hill Companies, Inc.McGraw-Hill/Irwin 11 th Edition Chapter 2.

1. 2  Business which buy raw materials and convert these into finished products which then sold 3.

Manufacturing Costs Managerial Accounting Prepared by Diane Tanner University of North Florida Chapter 29.

Lecture 05. Lecture 04 Service vs Merchandising Business Accounts on the Income Statement Terms used in merchandizing Sample income statement Computation.

McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Manufacturing Accounting Chapter Preparing a cost of goods manufacturing schedule. Learning Objective 1.

Manufacturing Accounts

Manufacturing accounts

Supplies of raw materials Manufacturing a/c  calculate the production cost A Manufacturing firm (make the product) Customers.

27-1. Job Order Cost Accounting Section 1: Cost Accounting Chapter 27 Section Objectives 1.Explain how a job order cost accounting system operates. McGraw-Hill©

Costs and Costing Systems Cost Units – units of output to which costs can be charged A cost is simply an item of expenditure Costs are defined as the normal.

Costs & Revenue Chapter 31.

Year 13 A2 Business Studies Company accounts. There are two main documents: Income statement (previously called profit and loss account) Balance sheet.

Costing and pricing decisions Costs are defined as the normal business expenses incurred in bring the goods (or services) to their present location and.

Production, Marketing and Administrative costs Manufacturing companies convert materials into finished goods. There are two type of costs involved here:

Prepared by Diane Tanner University of North Florida Review Concepts Basic Cost Terminology.

GOALS BUSINESS MATH© Thomson/South-WesternLesson 10.3Slide Total Costs of Labor Calculate cost of full-time employees Calculate cost of part-time.

CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 19-1 Elements of Manufacturing Cost.

£100 £500 £200 £1000 £750 £2000 £8000 £4000 £32,000 £16,000 £64,000 £250,000 £125,000 £1,000,000 £500,000 50:50 A. Trading Account The words Raw materials,

1 Manufacturing Account. 2 Production Cost Production cost = Prime cost / Direct cost + Factory overhead expenses / Indirect cost.

Basic Cost Management Concepts CHAPTER 2 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior.

Chapter1Chapter1 ACCOUNTING FOR MANUFACTURING OPERATION.

5.2 Costs and Revenues Chapter 31. Management Decisions and Cost Business decisions cannot be made without cost information. Why?  Profit or loss cannot.

Costs , Concepts, uses and Classifications

Overheads Overheads Allocation, Assignment and Absorption.

CHAPTER TWENTY-EIGHT JOB ORDER SYSTEM. MANUFACTURING BUSINESSES  Makes the items it sells  Accounting is more complicated  Multiple inventory accounts.

Does Washburn Guitars have a mathematical formula to compute the cost of each guitar? 1.Yes 2.No.

Slide 37.1 Wood and Sangster, Frank Wood's Business Accounting Volume 1 Power Points on the Web, 11 th Edition © Pearson Education Limited 2008 Divisions.

IB Business and Management

Chapter 3 Economics in the United States 3.3. Profit Profit is the money a business or person makes after expenses have been paid. Profits are very important.

© 2007 Pearson Education Canada Slide 4-1 Cost Management Systems 4.

Accounting for Manufacturing Business Lecture 24.

Click to edit Master title style Click to edit Master text styles –Second level Third level –Fourth level »Fifth level 1 1 Managerial Accounting.

COST SHEET Samir K Mahajan. COMPONENTS OF TOTAL COST  Prime cost or Direct cost : It is the aggregate of direct material cost, direct labour cost and.

AC239 Unit 3 Chapter 18 Managerial Accounting Concepts and Principles.

INTRODUCTION TO MANAGERIAL ACCOUNTING Course 1 – Panos Papadopoulos.

DIRECT MATERIAL + DIRECT LABOUR + DIRECT EXPENSES = PRIME COST.

Accounting for Manufacturing Business Lecture 25.

McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2009 Chapter 18 Managerial Accounting Concepts and Principles.

3.2 Costs and Revenues Topic 3: Finance and Accounts.

Copyright © 2015 McGraw-Hill Education. All rights reserved

Introduction to Cost Accounting and the Job Order Cost Cycle

Introduction to Managerial Accounting

Basic Cost Terminology

Managerial Accounting Concepts and Principles

Manufacturing Accounting

Cost Accounting-I Recording System.

Cost Accounting-I Examples.

Chapter 2 Classifying Costs

Product Costs and Prices

Product Costing Session Five MBA 502B Managerial Accounting

Recording System-Illustration

Classification of Cost

18 Managerial Accounting Concepts and Principles

Conversion Process Master It

Faculty – Dr. Satish Naringrekar

Presentation transcript:

GOALS BUSINESS MATH© Thomson/South-WesternLesson 11.1Slide Manufacturing Costs Calculate prime cost and total manufacturing costs Distribute factory expenses to units

BUSINESS MATH© Thomson/South-WesternLesson 11.1Slide 2 Manufacturing Costs Manufacturers make the products they sell. They must keep records of their factory costs so that they can control those costs and set selling prices that will produce a net income instead of a net loss.

BUSINESS MATH© Thomson/South-WesternLesson 11.1Slide 3 Factory Costs Three kinds of factory costs Raw materials Direct labor costs Factory overhead

BUSINESS MATH© Thomson/South-WesternLesson 11.1Slide 4 Raw Materials Costs Raw materials costs are the costs of materials which are used in manufacturing and which become part of the finished product.

BUSINESS MATH© Thomson/South-WesternLesson 11.1Slide 5 Direct Labor Costs Direct labor costs are the wages of all the workers who work directly on the products as they move through the factory.

BUSINESS MATH© Thomson/South-WesternLesson 11.1Slide 6 Factory Overhead Factory overhead includes the expenses that cannot be directly tied to producing a product. For example, it includes salaries and wages of the factory managers, supervisors, inspectors, and other workers who do not work directly on the manufactured products. It also includes building rent, depreciation of equipment, heat, power, insurance, and factory supplies.

BUSINESS MATH© Thomson/South-WesternLesson 11.1Slide 7 Prime Cost and Total Cost of Manufacturing The costs of raw materials and direct labor are called the prime cost of manufacturing a product. The prime cost plus factory overhead are the total manufacturing cost of a product. Prime Cost = Raw Materials + Direct Labor Total Manufacturing Cost = Prime Cost + Factory Overhead

BUSINESS MATH© Thomson/South-WesternLesson 11.1Slide 8 Distribute Factory Overhead to Units A manufacturer needs to know the costs of running each of its divisions, departments, or other units. So, factory expenses, or overhead, are often distributed or charged to each unit.

BUSINESS MATH© Thomson/South-WesternLesson 11.1Slide 9 Examples of Distributing Factory Overhead The way they are distributed varies with the company and the kind of expense. Rent may be distributed in proportion to the floor space used by the units. Taxes and insurance on equipment may be distributed based on the value of the equipment in each unit. Cleaning expenses may be distributed on the basis of floor space. Management salaries may be distributed based on the number of factory workers in a unit.

BUSINESS MATH© Thomson/South-WesternLesson 11.1Slide 10

BUSINESS MATH© Thomson/South-WesternLesson 11.1Slide 11

BUSINESS MATH© Thomson/South-WesternLesson 11.1Slide 12