Mng Ch1 Flashcards
3 types of manufacturing costs
Direct materials
Direct labor
Manufacturing overhead
How to calculate raw materials used
Raw materials inventory beg. \+Raw materials purchase ———————————- Raw materials available for use - raw materials inventory end ——————————————— Raw materials used
How to calculate total cost wip
Beg wip
+ total current manufacturing cost
————————————————
Total cost of wip
How to calculate cost of goods manufactured
Total wip
-ending wip
——————
Cost of goods manufactured
What goes into the different subgroups
Direct labor- must be traced in an economically feasible way to the assembly of products
Direct materials- wood metal… can be observed directly in made item
Manufacturing overhead- indirect materials and labor, factory electricity, janitors, factory taxes, factory insurance… anything related to the factory but not directly related to the product
Cost of goods available for sail
Finished goods inventory beg.
+ cost of goods manufactured
——————————————-
Cost of goods available for sale
Cost of goods sold
Cost of goods available for sale
- finished goods inventory end
—————————————
Cogs
Gross profit
Revenue
-cogs
Cost accounting
Measuring reporting and recording of product costs.
2 types of cost accounting systems
Job order (company assigns cost to each job or batch of goods) Process cost (used when a company manufacturers a large volume of similar products)
4 major steps to job order cost flow
Manufacturing costs
WIP
FGI
Cogs
Job cost sheet
Form used to record the costs chargeable to a specific job and to determine the total and unit costs of the completed job
Predetermined overhead rate
Estimated annual overhead/estimated annual operating activity
What are the source documents for direct materials, direct labor, manufacturing overhead?
Materials requisition
Time ticket
Calculation of pdoh
Journal entry for goods costing 15 and we’re sold for 20
Cogs. 15
FGI. 15
AR. 20
Sales Rev 20
Journal entry for paying manufacturing overhead
Manufacturing overhead xx
Cash. Xx
Process cost system
A cost accounting system where costs are tracked through a series of connected manufacturing processes or departments, rather than by individual jobs as in job order cost systems
Similarities through job order cost and process cost system
Track manufacturing cost
Accumulate costs in the same accounts
Assign accumulated accounts to the same accounts
Main difference between job order cost and process cost systems
In job order only 1 wip account is used
In job order cost system costs are changed to individual jobs and summarized in a job cost sheet
Costs are totaled at end of job in JC but end of period in PC
How to calculate equivalent units
Units completed and transferred out+equivalent units in ending wip= equivalent units of production
Prime cost
DM+DL
Conversion cost
DL+OH
Conversion costs for each month
Units transferred out + (units * conversion cost %)
How to determine total units to be accounted for
WIP beginning + started into production
