1. Manufacturing Accounting
Chapter 25 2

2. Preparing a cost of goods manufacturing schedule.
Learning Objective 1
Preparing a cost of goods
manufacturing schedule. 6

3. Learning Unit 25-1 (Cost of Goods Manufactured)
Manufacturing costs must be separated from
all other selling and administrative costs.
MANUFACTURING
Raw material
Direct labor
Overhead
ADMINISTRATIVE
Management
Sales personnel
Administrative

4. Learning Unit 25-1 (Cost of Goods Manufactured)
Finished
goods
inventory
Raw materials
used
WIP
inventory
Direct
labor
Cost of
goods sold
Manufacturing
overhead 4

5. Learning Unit 25-1 (Cost of Goods Manufactured)
Merchandising Company
Beginning merchandise inventory
+ Net purchases
= Cost of merchandise available for sale
– Ending merchandise inventory
= Cost of goods sold

6. Learning Unit 25-1 (Cost of Goods Manufactured)
Manufacturing Company
Beginning finished goods inventory
+ Cost of goods manufactured
= Cost of goods available for sale
– Ending finished goods inventory
= Cost of goods sold

7. Learning Unit 25-1 (Cost of Goods Manufactured)
Direct materials:
Beginning inventory
+ Net purchases
– Ending inventory
= Direct material cost
Work-in-process inventory:
Beginning inventory
+ Direct material cost
+ Direct labor
+ Manufacturing overhead
= Total manufacturing costs
– Ending inventory
= Cost of goods manufactured

8. Journalizing transactions manufacturing process.
Learning Objective 2
Journalizing transactions
recording the
manufacturing process. 6

9. Learning Unit 25-2 (The Flow of Manufacturing Costs)
Source documents provide
proof of transactions.
Receiving reports acknowledge
receipt of goods.
Material requisitions are requests
for materials from storage areas.

10. Learning Unit 25-2 (The Flow of Manufacturing Costs)
RECEIVING REPORT
Received from: Receiving Report No
Adams Company Date: 6/20x8
Quantity
50 Gals.
Description
Paint
Unit
Price
$6.50/Gal.
Total
Price
$325.00
Revilo Manufacturing Co.
Inspected By MS
Received By BJ

11. Learning Unit 25-2 (The Flow of Manufacturing Costs)
MATERIAL REQUISITION
Department Requisition No
Finishing Date: 6/20x8
Quantity
8 Gals.
Description
White Paint
Unit
Price
$6.50
Total
Price
$52.00
Revilo Manufacturing Co.
Inspected By CY
Received By JA

12. Learning Unit 25-2 (The Flow of Manufacturing Costs)
Clock card
Lot tickets
Labor distribution report
Bills of lading

13. Learning Unit 25-2 (The Flow of Manufacturing Costs)
Flow charts illustrate the movement
of material, labor, and overhead
through the operation.
Overhead – Control is debited
as costs are incurred.
Overhead – Applied is credited when
overhead is applied to products.

14. Learning Unit 25-2 (The Flow of Manufacturing Costs)
Debit Work-in-Process Inventory
Credit Raw Material Inventory
Debit Work-in-Process Inventory
Credit Payroll
Debit Overhead – Control
Credit Supplies Inventory

15. Learning Unit 25-2 (The Flow of Manufacturing Costs)
Debit Overhead – Control
Credit Payroll
Debit Overhead – Control
Credit Supervision Salaries
Credit Rent Expense
Credit Depreciation Expense
Credit Electricity Expense

16. Learning Unit 25-2 (The Flow of Manufacturing Costs)
Debit Work-in-Process Inventory
Credit Overhead – Applied
Debit Finished Goods Inventory
Credit Work-in-Process Inventory
Debit Cost of Goods Sold
Credit Finished Goods Inventory

17. Preparing a worksheet for a manufacturing company.
Learning Objective 3
Preparing a worksheet for
a manufacturing company. 6

18. Learning Unit 25-3 (Worksheet)
The worksheet for a manufacturing company
is used to produce the following:
Statement of cost of goods manufactured
Income statement
Statement of retained earnings
Balance sheet

19. Learning Unit 25-3 (Worksheet)
Trial
Balance
Adjustments
Cost of
Goods
Manufactured
Income
Statement
Balance
Sheet
Statement of Cost of
Goods Manufactured
Income
Statement
Balance
Sheet
Statement of
Retained Earnings

20. End of Chapter 25