Consult your own attorney as to legal cost of goods sold, the difference between obligations and rights. If the ethical issue still exists after ex- the determination of the cost of goods hausting all levels of internal review, available for sale.
Since the manufacturing there may be no other recourse on sig- business makes the products it has availa- nificant matters than to resign from the ble for sale, the cost of goods manufac- organization.
Corporate governance is the means by which beginning finished goods inventory to de- a company is directed and controlled. Good termine the cost of finished goods available corporate governance is important to all for sale. Since the merchandiser purchases rather than makes goods to sell, the cost of stakeholders because, due to recent account- purchases is added to beginning merchan- ing scandals, the need for ethical conduct in dise inventory to compute the cost of goods managing corporate affairs has never.
The recent accounting scandals where Key elements of the Sarbanes-Oxley Act Materials—this account represents the cost include: certification by the CEO and CFO of materials on hand that will be used in the that the financial statements fairly reflect the manufacturing process. VanDerbeck, Chapter 01 3 Manufacturers, such as aircraft producers cost but required an inordinate amount of and home builders, make tangible products time to trace directly to the products being by applying labor and technology to raw ma- manufactured.
They may have as many as three in- Prime cost is the cost of direct materials and ventory accounts: Finished Goods, Work in direct labor; it represents cost specifically Process, and Raw Materials.
Merchandisers, identified with the product. They have only one inventory convert raw materials into finished goods. Service businesses, such as airlines and sports fran- No, one of the component costs, direct labor, chises, provide intangible benefits such as would be added twice.
The cost of manufactur- transportation and entertainment. They have ing includes direct materials, direct labor, and no inventory account. Both prime cost and conver- A perpetual inventory system involves main- sion cost include the cost of direct labor. Costs for direct materials and direct labor are sues, and new balances of all goods in charged directly to the work in process ac- stock.
Under a periodic inventory system no count, while the factory overhead costs are attempt is made to record the cost of mer- chandise sold at the time of sale. At the end first accumulated in the factory overhead ac- of the accounting period a physical inventory count and are then transferred to the work. Cost of goods sold represents the total cost of goods sold and the ending inventory. The basic elements of production cost are: a given accounting period, while the cost of a.
Direct materials. Direct labor. Factory overhead. Direct materials—the cost of those materi- Non-factory costs are charged to selling or als which become part of the item being general administrative expense accounts manufactured and can be readily identified and do not affect the determination of manu- with it.
Costs which benefit both Indirect materials—the cost of those items factory and non-factory operations must be which are necessary for the manufacturing allocated in some equitable manner.
Job order costing is appropriate when the tured. Manufac- employees who are required for the manu- turers such as machine shops and ship- facturing process but who do not work di- builders, merchandisers such as computer rectly on the item being manufactured. Manufacturers such as As manufacturing processes have become increasingly automated, direct labor cost as chemical producers and candy makers, mer- a percentage of total product cost has de- chandisers such as newspapers and agricul- creased for many companies.
An advantage of accumulating costs by de- Standard costs are reasonably attainable partments process costing or by jobs j ob costs which are estimated by management order costing is that the information provid- in advance of production. Standard costs ed aids management in achieving control of are then compared with actual costs, and costs. With a process cost system, man- differences called variances are calculated agement can make departmental compari- and analyzed.
A standard cost system is not sons of current period costs with prior period a separate cost accounting system but is costs and can take corrective action as applied in conjunction with either process needed. If costs were accumulated for the costing or job order costing to increase cost factory as a whole, management would have control effectiveness.
Square footage occupied by each of the ar- cessive costs and inefficiencies. The infor- eas would be a good cost allocation base to mation provided by a job order cost system use in allocating the depreciation expense aids management in the determination of between the factory operations and the sell- selling prices, the profit on each job, and ing and administrative function.
This distinc- costs applicable to similar jobs produced in tion is important because the depreciation future periods. A job cost sheet is a form on which all of the turing expense that becomes part of invento- individual costs applicable to a job are rec- ry cost and eventually cost of goods sold, orded.
Since the job cost sheets show de- whereas the portion allocated to selling and tailed costs and gross profit for each job, administrative expense is a period cost that they are useful to management in bidding on is always expensed in the period incurred. E No, the performance report should not be prepared just once a year. It should be furnished to managers at regular intervals, in this case monthly, on a timely ba- sis.
If it is not provided in a timely fashion, it will not be effective in controlling fu- ture operations. E Merchandise inventory, January Items Materials Labor Overhead Expense a. Cloth used in a shirt factory Fiberglass used by a sailboat builder Cleaning solvent for the factory floor Wages of a binder employed in a printing plant Insurance on factory machines Rent paid for factory buildings Wages of the Machining Department supervisor Leather used in a shoe factory Wages of a factory janitor Electric power consumed in operating factory machines Depreciation on corporate offices Fuel used in heating a factory Paint used in the manufacture of jet skis ….
Wages of an ironworker in the construction business Electricity used in lighting sales offices When direct materials and supplies are issued to the factory, the materials account is credited, Work in Process is debited for the cost of the direct materials, and the factory overhead account is debited for the cost of indirect materials.
When labor costs are distributed, the payroll account is credited, Work in Process is debited for the cost of direct labor, and Factory Overhead is debited for the cost of indi- rect labor. VanDerbeck, Chapter 01 7 As other costs related to manufacturing are recorded, the factory overhead account is charged. The debit to Work in Process for factory overhead is made by allocating over- head expenses to this account. At the same time, the factory overhead account is cred- ited.
The total cost of goods completed is recorded by debiting Finished Goods and crediting Work in Process. E Valley View Manufacturing Co. Materials: Inventory, January Finished goods inventory, January VanDerbeck, Chapter 01 9 E a. Direct materials used during the period Total manufacturing costs incurred during the period Cost of goods available for sale Work in Process— Jobs, , Finished Goods VanDerbeck, Chapter 01 11 E a.
Work in Process— Jobs , , Work in Process Cost of Goods Sold Merchandise inventory, April Finished goods, April We don't recognize your username or password. Please try again. The work is protected by local and international copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning.
You have successfully signed out and will be required to sign back in should you need to download more resources. Datar, Harvard University Madhav V. Rajan, Stanford University. If You're an Educator Download instructor resources Additional order info. Overview Order Downloadable Resources Overview. Description This solution manual contains step-by-step solutions to all complete, end-of-chapter exercises.
Download Resources. Previous editions. Relevant Courses. Sign In We're sorry!
0コメント