25 - 1 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater

Manufacturing
Accounting
Chapter 25
25 - 2 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Preparing a cost of goods
manufacturing schedule.
Learning Objective 1
25 - 3 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
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
25 - 4 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Raw materials
used
Manufacturing
overhead
Direct
labor
Cost of
goods sold
Learning Unit 25-1
(Cost of Goods Manufactured)
Finished
goods
inventory
WIP
inventory
25 - 5 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Beginning merchandise inventory
+ Net purchases
= Cost of merchandise available for sale
Ending merchandise inventory
= Cost of goods sold
Learning Unit 25-1
(Cost of Goods Manufactured)
25 - 6 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Beginning finished goods inventory
+ Cost of goods manufactured
= Cost of goods available for sale
Ending finished goods inventory
= Cost of goods sold
Learning Unit 25-1
(Cost of Goods Manufactured)
25 - 7 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
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
25 - 8 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Journalizing transactions
recording the
manufacturing process.
Learning Objective 2
25 - 9 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
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.
25 - 10 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Unit 25-2 (The Flow of
Manufacturing Costs)
RECEIVING REPORT
Received from: Receiving Report No. 1031
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
25 - 11 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Unit 25-2 (The Flow of
Manufacturing Costs)
MATERIAL REQUISITION
Department Requisition No. 3648
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
25 - 12 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Unit 25-2 (The Flow of
Manufacturing Costs)
Clock card
Lot tickets
Labor distribution report
Bills of lading
25 - 13 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
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.
25 - 14 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Debit Work-in-Process Inventory
Credit Raw Material Inventory
Debit Work-in-Process Inventory
Credit Payroll
Debit Overhead Control
Credit Supplies Inventory
Learning Unit 25-2 (The Flow of
Manufacturing Costs)
25 - 15 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Debit Overhead Control
Credit Payroll
Debit Overhead Control
Credit Supervision Salaries
Credit Rent Expense
Credit Depreciation Expense
Credit Electricity Expense
Learning Unit 25-2 (The Flow of
Manufacturing Costs)
25 - 16 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
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
Learning Unit 25-2 (The Flow of
Manufacturing Costs)
25 - 17 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Preparing a worksheet for
a manufacturing company.
Learning Objective 3
25 - 18 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
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
25 - 19 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
Learning Unit 25-3
(Worksheet)

Trial
Balance


Adjustments
Cost of
Goods
Manufactured

Income
Statement

Balance
Sheet
Statement of
Retained Earnings
Balance
Sheet
Statement of Cost of
Goods Manufactured
Income
Statement
25 - 20 2004 Prentice Hall Business Publishing, College Accounting: A Practical Approach, 9e by Slater
End of Chapter 25