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Lecture 08.

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Presentation on theme: "Lecture 08."— Presentation transcript:

1 Lecture 08

2 Lecture Overview Variable Cost Fixed Cost
Cost Classifications for Predicting Cost Behavior Direct Costs and Indirect Costs Cost Concepts Cost, Product Cost, Period Cost Components of Manufacturing Products Cost of Good Manufactured Cost of Goods Sold Income Statements

3 Following data refer to Company XYZ for the year 2008
Following data refer to Company XYZ for the year Prepare income statement for the year 2008 Sales revenue 950000 Work-in-process inventory, December 31 30000 Work-in-process inventory, December 01 40000 Selling and administrative expenses 150000 Income tax expense 40% Purchase of raw material 180000 Raw-material inventory, December 31 25000 Raw-material inventory, December 01 Direct labor 200000 Utilities, plant Depreciation: plant and equipment 60000 Finished goods inventory, December 31 50000 Finished goods inventory, December 01 20000 Indirect material 10000 Indirect labor 15000 Other manufacturing overhead 80000

4

5 Following data refer to Company XYZ for the year 2008
Following data refer to Company XYZ for the year Prepare income statement for the year 2008 Sales revenue 950000 Work-in-process inventory, December 31 30000 Work-in-process inventory, December 01 40000 Selling and administrative expenses 150000 Income tax expense 40% Purchase of raw material 180000 Raw-material inventory, December 31 25000 Raw-material inventory, December 01 Direct labor 200000 Utilities, plant Depreciation: plant and equipment 60000 Finished goods inventory, December 31 50000 Finished goods inventory, December 01 20000 Indirect material 10000 Indirect labor 15000 Other manufacturing overhead 80000

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7

8 Practice Question with Missing Data

9 Case A Case B Case 3 Beginning Inventory, raw Material ? Rs Rs Ending Inventory, raw Material Rs 30000 Purchase of Raw Material 100000 85000 Direct Material 70000 95000 Direct Labor 125000 Manufacturing Overhead 250000 160000 Total Manufacturing Cost 520000 395000 340000 Beginning Inventory, work in process 35000 20000 Ending Inventory, work in process 5000 Cost of Good Manufactured 525000 350000 Beginning Inventory, finished goods 50000 40000 Cost of Goods available for Sale 370000 Ending Inventory, finished goods 25000 Cost of Goods Sold 545000 33000 Sales 480000 Gross margin 255000 170000 Selling and admin expenses 75000 Income before taxes 150000 90000 Income tax expense 45000 Net income 55000

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11 Case A Case B Case 3 Beginning Inventory, raw Material ? Rs Rs Ending Inventory, raw Material Rs 30000 Purchase of Raw Material 100000 85000 Direct Material 70000 95000 Direct Labor 125000 Manufacturing Overhead 250000 160000 Total Manufacturing Cost 520000 395000 340000 Beginning Inventory, work in process 35000 20000 Ending Inventory, work in process 5000 Cost of Good Manufactured 525000 350000 Beginning Inventory, finished goods 50000 40000 Cost of Goods available for Sale 370000 Ending Inventory, finished goods 25000 Cost of Goods Sold 545000 33000 Sales 480000 Gross margin 255000 170000 Selling and admin expenses 75000 Income before taxes 150000 90000 Income tax expense 45000 Net income 55000

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13 End of Lecture 08

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