CGM, CGS, IS Flashcards
one primary responsibility for a cost accountant is to determine..
the CGS on the income statement
it is hard for the cost accountant to determine CGS when…
products are manufactured
it is easy for cost accountant to determine CGS when…
products are purchased from supplier
DM, DL, and MOH move to…
WIP
WIP moves to…
FG
FG moves to…
CGS
products are moved from FG to CGS when…
they are sold and shipped
FG are goods that are…
completed but not sold
total cost to manufacture goods is reported where?
a portion in inventory on the balance sheet, a portion in CGS on the income statement
product costs are expensed in the period that…
the product is SOLD
DM used in production =
beginning DM inv + purchased DM - ending DM inv
total manufacturing costs =
DM used in production + DL + MOH
total manufacturing costs are also called…
product costs
CGM =
total manufacturing costs + beg WIP inv - end WIP inv
average cost per unit =
CGM / # of finished units
CGM is the cost of units…
FINISHED this period
CGS =
beginning FG inv + CGM - end FG inv
what is prepared on the income statement?
sales - CGS = GI
- op expenses
= operating income
when FG decreases…
more products are sold than produced, CGS > CGM
three different types of inventory reported by a manufacturing company
- DM
- WIP
- FG
WIP is…
DM, DL, and MOH still on the the product like at the end of the period
a service company…
does not manufacture goods for customers, so there is no WIP
cost of providing services includes…
labor and overhead, and cost of materials used
