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  • 4-The Cost Accounting Cycle

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    Hinazeeshan Malik
    867 vizualizări17 pagini
    This document discusses the cost accounting cycle for a company called Bryan Company. It goes through the steps of the cost accounting cycle, including purchasing materials, tracking direct labor costs, allocating overhead costs, transferring costs to work in process and finished goods inventories, and calculating cost of goods sold. The cycle results in an income statement showing the company's sales, costs, gross profit, expenses, and net income for the period.

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    This document discusses the cost accounting cycle for a company called Bryan Company. It goes through the steps of the cost accounting cycle, including purchasing materials, tracking direct labor costs, allocating overhead costs, transferring costs to work in process and finished goods inventories, and calculating cost of goods sold. The cycle results in an income statement showing the company's sales, costs, gross profit, expenses, and net income for the period.

    Drepturi de autor:

    Attribution Non-Commercial (BY-NC)
    Descărcați ca PDF, TXT sau citiți online pe Scribd
    Indicator pentru conținut neadecvat
    867 vizualizări17 pagini

    4-The Cost Accounting Cycle

    Încărcat de

    Hinazeeshan Malik
    This document discusses the cost accounting cycle for a company called Bryan Company. It goes through the steps of the cost accounting cycle, including purchasing materials, tracking direct labor costs, allocating overhead costs, transferring costs to work in process and finished goods inventories, and calculating cost of goods sold. The cycle results in an income statement showing the company's sales, costs, gross profit, expenses, and net income for the period.

    Drepturi de autor:

    Attribution Non-Commercial (BY-NC)
    Descărcați ca PDF, TXT sau citiți online pe Scribd
    Indicator pentru conținut neadecvat
    din 17

    FNSACCT507B Provide Management Accounting Information

    The Cost Accounting Cycle

    23 Nov 2011

    BANG

    Learning Outcome
    The Production Progress Flow of Cost in Product Manufacturing Journal and ledger system:
    Input cost accounts Progressing cost accounts Output cost accounts

    23 Nov 2011

    BANG

    The Production Progress


    The Production Progress involves converting input into output:

    INPUT

    PROCESS

    OUTPUT

    23 Nov 2011

    BANG

    Flow of Cost in Product Manufacturing


    Materials

    Indirect
    Overhead

    Direct
    Work In Process Finished Goods Cost Of Good Sold

    Indirect
    Labour

    Direct

    23 Nov 2011

    BANG

    The Cost Accounting Cycle


    Bryan Company produces a plywood countertop backing. Bryan had no beginning inventories of work in process.

    23 Nov 2011

    BANG

    The Cost Accounting Cycle


    Purchase of materials: Bryan bought 1,400,000 feet of wood at $0.095 per foot.

    1. Materials Inventory Cash or Accounts Payable

    $133,000
    $133,000

    23 Nov 2011

    BANG

    The Cost Accounting Cycle


    Bryan used 1,300,000 feet of wood. 2. Work in Process Materials Inventory $123,500

    $123,500

    23 Nov 2011

    BANG

    The Cost Accounting Cycle


    Direct laborers earned $344,400 for 41,000 hours of work at $8.40 per hour.

    3a. Direct Labor Cash or Accrued Payroll 3b. Work in Process Inventory Direct Labor

    $344,400
    $344,400 $344,400

    $344,400

    23 Nov 2011

    BANG

    The Cost Accounting Cycle


    Bryan incurred various overhead costs.
    4. Variable Manufacturing Overhead $251,300 Fixed Manufacturing Overhead 461,000 Various, Cash, Accrued Expenses, Accumulated Depreciation $712,300

    23 Nov 2011

    BANG

    The Cost Accounting Cycle


    Bryan finished 40,000 square yards of plywood. Another 3,000 square yards were still in process at the end of 20X5. 5. Work in Process Inventory Variable Mfg. Overhead Work in Process Inventory Fixed Mfg. Overhead $251,300 $251,300 $461,000 $461,000

    23 Nov 2011

    BANG

    10

    The Cost Accounting Cycle


    Materials Direct labor Variable overhead Fixed overhead Total Divided by equivalent production Equals cost per unit $ 123,500 344,400 251,300 461,000 $1,180,200 42,000 $ 28.10

    23 Nov 2011

    BANG

    11

    The Cost Accounting Cycle


    The $28.10 cost per unit is used to transfer to Finished Goods Inventory (40,000 units).

    6. Finished Goods Inventory $1,124,000 Work in Process Inventory $1,124,000

    23 Nov 2011

    BANG

    12

    The Cost Accounting Cycle


    Bryan sold 35,000 square yards that cost $28.10 at $40 each.

    7a. Cash or Accounts Receivable $1,400,000 Sales $1,400,000 7b. Cost of Goods Sold $983,500 Finished Goods Inventory $983,500
    23 Nov 2011 BANG 13

    The Cost Accounting Cycle


    The company incurred $340,000 in selling and administrative expenses.

    8. Selling and Administrative Expenses Cash, Accrued Expenses

    $340,000 $340,000

    23 Nov 2011

    BANG

    14

    The Cost Accounting Cycle


    (2) (3b) (5) (5)

    Bal.

    Work in Process Inventory $ 123,500 344,400 251,300 $1,124,000 (6) 461,000 1,180,200 $1,124,000 $ 56,200

    23 Nov 2011

    BANG

    15

    The Cost Accounting Cycle


    Finished Goods Inventory (6) $1,124,000 $983,500 (7b) Bal. $ 140,500
    Cost of Goods Sold $983,500

    (7b)

    23 Nov 2011

    BANG

    16

    The Cost Accounting Cycle


    Income Statement for Bryan Company, Actual Process Costing

    Sales (Slide 14-28) Cost of goods sold (Slide 14-28) Gross profit Selling and administrative expenses (Slide 14-29) Income

    $1,400,000 983,500 $ 416,500

    340,000 $ 76,500

    23 Nov 2011

    BANG

    17

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