2 Inventory Cost Accounting Tips and Tricks Nick Bergamo, Senior Manager Linda Pei, Senior Manager 2
3 Disclaimer The material appearing in this presentation is for informational purposes only and is not legal or accounting advice. Communication of this information is not intended to create, and receipt does not constitute, a legal relationship, including, but not limited to, an accountant-client relationship. Although these materials may have been prepared by professionals, they should not be used as a substitute for professional services. If legal, accounting, or other professional advice is required, the services of a professional should be sought. 3
4 Nick Bergamo Senior Manager Linda Pei Senior Manager Presenters 4
5 Objectives Session Objectives: Understand the principles, procedures and terminologies of inventory management and manufacturing cost accounting Understand the flow and accounting of inventory costs Understand various costing methodologies Describe basic controls around product costing Benefits and pitfalls of costing techniques
6 Agenda Overview Inventory and Cost Accounting Types of Inventory Manufacturing Product Cost Elements Types of Cost Systems Product Costing Standard Costing Inventory Controls
7 Overview: Inventory and Cost Accounting Inventory is defined as (FASB ASC ): Assets held for sale in the ordinary course of business ( FGs ), In the process of production for sale ( WIP ), or To be consumed in the production of goods and services to be available for sale ( RMs ). Typically excludes long-term assets subject to depreciation accounting (including fixed assets held for sale). The primary basis of accounting is cost.
8 Overview: Inventory and Cost Accounting (cont.) Issues related to inventory accounting include: Definition and classification of inventories RMs vs WIP vs FGs Transfer of ownership - purchasing / selling Costing inventories Cost flow assumptions Valuation methodologies FIFO / Average Cost / LIFO
9 Cost Chart: Manufacturing Company Total Cost Product Cost Period Cost Direct Materials Direct Labor Manufacturing Overhead Sales & Distribution Research & Development General & Administrative Prime Cost Conversion Cost
10 Cost Accounting: Definition and Importance The systematic collecting, classifying, recording and analyzing of costs of production. Considers cost (money) as the economic factor of production. If properly used, is suitable for: Sales control, Production control, and Financial/administrative control (budgeting and analysis).
11 Cost Accounting: Cost Flow in Manufacturing Action Cost Collected Cost Flow to and Through Purchase materials Materials Inventory Pay direct laborers Direct Labor Work in Process Finished Goods Cost of Goods Sold Incur overhead costs Manufacturing Overhead
12 Types of Inventory: Manufacturing 1. Raw Materials inventory that is to be consumed in the process of production of goods for sale to customers. 2. Work in Process inventory that is in the process of production of goods for sale to customers. 3. Finished Goods completed inventory units awaiting sale to customers.
13 Cost Accounting: Cost Elements 1. Direct Materials material costs that are conveniently and directly allocable to the production of goods. 2. Direct Labor labor costs that are conveniently and directly allocable to the production of goods. 3. Factory Overhead all manufacturing costs other than direct materials and direct labor. Fixed overhead (e.g. rent) Variable overhead (e.g. utilities)
14 Cost Accounting: Cost Systems Job Order Costing costs are accumulated and assigned to an individual product or batches of product. Used when the products manufactured are sufficiently different from each other. Create a job cost record for each item, job or special order to report the direct materials and direct labor actually used plus the manufacturing overhead assigned to each job. Example - building construction industry
15 Cost Accounting: Cost Systems (cont.) Process Costing costs are accumulated and assigned to the entire production process. This is sometimes allocated to the units produced. Used when nearly identical units are mass produced. Typically no job cost record for each item, but an allocation of total costs to each unit for a given period of time. Example Beverage industry
16 Cost Accounting: Cost Systems (cont.) Operational Cost Accounting costing method where neither process nor job-lot costing applies. Example Assembly industries
17 Polling Question #1 What cost system does your company currently employ? a. Job order costing. b. Process costing - actual. c. Process costing - standard. d. Other.
18 Cost Accounting: Product Costing - Manufacturing 1. GAAP Absorption Costing All of the manufacturing costs are absorbed by the units produced. 2. Non-GAAP A. Actual Costing B. Normal Costing C. Standard Costing Variable / Throughput Costing Some indirect manufacturing costs are not allocated or assigned to (not absorbed by) the products manufactured.
19 Cost Accounting: Product Costing Manufacturing (cont.) Product Costing Method Comparison Direct Materials Manufacturing Costs Direct Labor Variable Overhead Fixed Absorption Costing Yes Yes Yes Yes Variable Costing Yes Yes Yes No Throughput Costing Yes No No No
20 Cost Accounting: Product Costing Manufacturing (cont.) Absorption Costing Method Comparison Manufacturing Costs Direct Materials Direct Labor Overhead Actual Costing Actual Actual Actual Normal Costing Actual Actual Applied Standard Costing Standard Standard Standard
21 Cost Accounting: Standard Costing Standard Costing Pre-determined costs are assigned as product cost Acceptable as long as adjusted at regular intervals for changes in fact patterns
22 Cost Accounting: Standard Costing (cont.) Material Cost Standards 1. Price Standard the price that should be paid for a unit of material 2. Quantity Standard the amount of material that should be consumed in the manufacturing of one unit of product
23 Cost Accounting: Standard Costing (cont.) Material Variance Price Variance (Actual Rate Standard Price) x Quantity Purchased Purchase Variance (PO Price Standard Price) x Quantity Purchased Purchasing Invoice Price Variance (Invoice Price PO Price) x Quantity Purchased Usage Variance (Actual Qty. Used Standard Qty.) x Standard Price Production
24 Cost Accounting: Standard Costing (cont.) Labor Cost Standards 1. Rate Standards the cost of labor that is applied to manufacture one unit of product 2. Quantity Standard the amount of time required to make one unit of product
25 Cost Accounting: Standard Costing (cont.) Labor Variance Rate Variance (Actual Rate Standard Rate) x Actual Labor Hours Efficiency Variance (Actual Hours Standard Hours) x Standard Rate Salary Negotiation & Production Production
26 Cost Accounting: Standard Costing (cont.) Manufacturing Overhead 1. Standard Overhead Cost (Budget) the cost of overhead that is applied to manufacture one unit of product 2. Standard Volume (Capacity) the normal activity expected or budgeted over the coming two to five years
27 Cost Accounting: Standard Costing (cont.) Manufacturing Overhead Variance Total Overhead Variance Two-way Analysis Budget Variance (Actual Cost-Budgeted Cost for Standard Hours) Three-way Analysis Four-way Analysis Spending Variance (Actual Cost-Budget for Actual Hours Worked) Variable Spending (Actual VOH- Budgeted VOH for Actual Hours) Fixed Spending (Actual FC- Budgeted FC) Efficienc y Variance (Actual Hours/unit) x Actual Production x Variable Standard Rate Volume Variance (Actual Units Budgeted Units) x Fixed Cost Application Rate
28 Polling Question #2 Does your company currently utilize the services of a third party manufacturer? a. Yes, we have an established relationship with our manufacturing partner. b. Yes, but the relationship is somewhat new. c. No, manufacturing occurs in-house. d. No, we do not manufacture any products.
29 Scenario of Actual Costing ABC, LLC is a beverage company founded in January 2000 with five Stock Keeping Units (SKUs). The Company has steady and stable production volumes from month to month and little to no variability in material, labor and overhead costs.
30 Actual Costing Recording of Transactions ABC, LLC purchases raw material on account for $10,000 (10,000 units). Db Raw Material $10,000 Cr Accounts Payable $10,000 ABC, LLC spent $5,000 on payroll (direct labor for 10,000 units). Db Inventory (labor) $5,000 Cr Cash $5,000 ABC, LLC spent $5,000 on rent and utilities for warehouse (overhead for 10,000 units) Db Inventory (Overhead) $5,000 Cr Cash $5,000 ABC, LLC just manufactured 10,000 units of the SKU for $2/unit.
31 Actual Costing Recording of Transactions ABC, LLC sells 5,000 units of the SKU for $4/unit on account. Db Accounts Receivable $20,000 Cr Revenue $20,000 Db COGS $10,000 Cr Inventory $10,000 At year-end, the Company s remaining inventory balance is valued at $10,000 for the 5,000 units of the SKU.
32 Pros & Cons of Actual Costing Pros Cons Real time true margins All data entered must be accurate Straight forward inventory valuation Requires system capabilities to allocate to jobs (multiple SKUs)
33 Polling Question #3 What are the characteristics of a Company that should use actual costing? a. Few SKUs and stable volumes b. Multiple SKUs c. System capabilities to allocate costing to jobs d. A and C
34 Scenario of Standard Costing ABC, LLC is a beverage company founded in the 1970s. The Company has international operations with over 2,000 SKUs. Most SKUs are matured products with stable and steady volumes. However, the Company consistently adds new products and strive to obtain efficiency on all productions.
35 Standard Costing Recording of Transactions For SKU , the standard cost of the item is $1.0/unit ($0.6 for material, $0.2 for labor, and $0.2 for overhead) ABC, LLC purchases raw material on account for $10,000 (10,000 units). ABC, LLC spent $5,000 on payroll (direct labor for 10,000 units). ABC, LLC spent $5,000 on rent and utilities for warehouse (overhead for 10,000 units) Db Inventory Db Material Price Variance Db Labor Rate/Price Variance Db Overhead Spending Variance Cr Account payable Cr Cash $10,000 $1/unit per standard) $4,000 (actual vs. standard) $3,000 (actual vs. standard) $3,000 (actual vs. standard) $10,000 (for raw materials) $10,000 (for labor & overhead)
36 Standard Costing Recording of Transactions ABC, LLC sells 5,000 units of the SKU for $4/unit on account. Db Accounts Receivable $20,000 Cr Revenue $20,000 Db COGS $5,000 Cr Inventory $5,000 At year-end, the Company s remaining inventory balance is valued at $5,000 for the 5,000 units of the SKU ($10,000 under actual costing). However, an analysis and adjustment needs to be done to capitalize certain labor and overhead for those inventories not sold (i.e. potentially $5,000).
37 Standard Costing Variance Analysis and Capitalization Variance Analysis Why did materials cost more? Efficiency issues in production? How to improve? Permanent or temporary? Capitalization Machine hours Labor hours Inventory turnover
38 Pros & Cons of Standard Costing Pros Cons Benchmark to measure performance Needs to update standards Budgeting and forecasting tool Requires more resources for analysis
39 Polling Question #4 What are the characteristics of a Company that should use standard costing? a. Multiple SKUs b. Complex inventory structure (numerous components for finished goods) c. Good budgeting and forecasting controls d. All the above
40 Long-Term Benefits 1. Helps to identify unprofitable activities, losses or inefficiencies. 2. The cost structure is often a target review area of a potential acquisition. Critical in determining purchase price. 3. Provides information to management and serve as guide in making decisions involving financial considerations. 4. Useful for price fixation; test the adequacy of selling prices. 5. Identify idle capacity in order to provide efficiency.
41 Inventory Controls Sample Inventory Controls Standard Cost Review Variances, Inventory Revaluation, and Absorption Costing Review and Allocation Inventory Cut-off Controls Inventory Count, Confirmation and Enterprise Unified Process (EUP) Estimation Inventory Reserves Calculation Inventory Reconciliation Inventory Roles Segregation of Duties
42 Questions? Nick Bergamo Senior Manager Linda Pei Senior Manager
1 Chapter 2 Introduction to Cost Terms and Purposes Cost A cost is the value of economic resources (e.g., money) sacrificed or used up to achieve a particular objective (e.g., produce a product or perform
Part 1 Study Unit 5 Cost Accumulations Systems Jim Clemons, CMA Ronald Schmidt, CMA, CFM 1 Overview Cost accounting systems record manufacturing activities using a perpetual inventory system, which continuously
IAS - 02 INVENTORIES Objective To prescribe the accounting treatment for inventories. Scope All inventories except: (a) (b) Financial instruments (see IAS 32 Financial Instruments: Presentation and IFRS
Lecture 2: Flow of resource costs Cost Object: anything for which a separate measurement of costs is required, e.g. products, services, customers, projects, processes, segments of the value chain, divisions/departments,
Chapter 1 Question Review 1. Which of the following is not a characteristic of managerial accounting: a) Emphasizes decisions affecting the future b) Mandatory for external reports c) Need not follow GAAP
CHAPTER ONE: OVEVIEW OF MANAGERIAL ACCOUNTING The Basic Objectives of Accounting Basic objective of accounting is to provide stakeholders with useful information about a business enterprise in order to
TM 3-1 AGENDA: JOB-ORDER COSTING A. The documents in a job-order costing system. 1. Materials requisition form. 2. Direct labor time ticket. 3. Job cost sheet. B. Applying overhead using a predetermined
7. Understand the difference between inventoriable vs non inventoriable costs given the type of organization (merchandising vs manufacturing vs service) Inventoriable cost: cost included in the value of
Multiple Choice Questions: 1- The Value Chain a- Involves external companies as well as internal activities. b- Is the sequence of business functions in which customer usefulness is added to products or
Ir. Haery Sihombing/IP Pensyarah Fakulti Kejuruteraan Pembuatan Universiti Teknologi Malaysia Melaka Chapter 3 DIRECT COST Chapter 4 INDIRECT COSTS C O S T COST Cost is not a simple concept. It is important
Chapter 3 COST CONCEPT AND DESIGN ECONOMICS C O S T Ir. Haery Sihombing/IP Pensyarah Fakulti Kejuruteraan Pembuatan Universiti Teknologi Malaysia Melaka COST Cost is not a simple concept. It is important
Visual EstiTrack Understanding Inventory Reconciliation (Supplement) November 2005 OVERVIEW: Methods of Reconciling Inventory Values Most companies that maintain raw material, work in process and finished
IAS 2 DEFINITIONS NRV FV are assets: (a) held for sale in the ordinary course of business (finished goods); (b) in the process of production for such sale (WIP); or (c) in the form of materials or supplies
Chapter 9: Inventories Raw materials and consumables Finished goods Work in Progress Variants of valuation at historical cost other valuation rules 1 Characteristics of Inventories belong to current assets
DEFINITIONS AND CONCEPTS ** CONCEPTS AND DEFINITIONS IN THIS MODULE APPEAR IN VARIOUS CHAPTERS ** Key Terms and Concepts to Know Major Management Activities Planning - formulating long and short-term plans
Revised Syllabus of the Courses of B.Com. Programme at T.Y.B.Com. with Effect from the Academic Year 2015-2016 for IDOL Students Financial Accounting and Auditing Paper-III Financial Accounting SECTION
CHAPTER 2 An Introduction to Cost Terms and Purposes Overview This chapter introduces the basic terminology of cost accounting. Communication among managers and management accountants is greatly facilitated
COST ACCOUNTING b.com part II 2014 Regular & Private (SUPPLEMENTARY) Solved Paper Compiled & Solved by: Sameer Hussain Instructions: (1) Attempt any FIVE questions. (2) All questions carry equal marks.
Which of the following is correct? Units sold=opening finished goods units + Units produced Closing finished goods units Units Sold = Units produced + Closing finished goods units - Opening finished goods
CHAPTER 4 INVENTORIES LEARNING OUTCOMES After studying this chapter, you will be able to: Understand the meaning of term 'Inventory'. Learn the technique of Specific identification method, FIFO, Average
*Brief Exercise 19-1 0 Presented below are incomplete manufacturing cost data. Determine the missing amounts for three different situations. Direct Materials Used Direct Labor Used Factory Overhead (a)
Unleash Hidden Profits: Make Your Supply Chain Work for You Objective Learn how you can Reduce Working Capital Improve Cash Flow Increase Profits by improving how you manage your materials and supply chain
An Introduction to Cost terms and Purposes Session 2 Learning Objectives Define and illustrate a cost object Distinguish between direct costs and indirect costs Explain variable costs and fixed costs Interpret
Chapter 13 Auditing the Inventory Management Process Copyright 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Gatsby s Accounting System and Policies a Images used on the front cover and throughout this book were obtained under license from Shutterstock.com 2017, by Armond Dalton Publishers, Inc. All rights reserved.
Modul ke: Akuntansi Biaya Direct Material Cost Fakultas 09FEB Diah Iskandar SE., M.Si dan Nurul Hidayah,SE,Ak,MSi Program Studi Akuntansi Effective Cost Control Specific assignment of duties and responsibilities.
SOLUTIONS TO EERCISES EERCISE 2-1 (15 minutes) 1. F; I 2. V ; D 3. V ; D 4. F; I 5. F; I 6. F; I 7. V ; D 8. F; I 9. F; I 10. V ; D 11. F; I 12. F; I 13. F; I 14. F; I EERCISE 2-2 (15 minutes) 1. Product
Similarities Between Job-Order and Process Costing 4-1 Both systems assign material, labor, and overhead costs to products and they provide a mechanism for computing unit product costs. Both systems use
9-1 9-2 Chapter MANAGEMENT 9 ACCOUNTING A BUSINESS PARTNER To explain the three principles guiding the design of management accounting systems. LO1 Management Accounting: Basic Framework 9-3 Management
Smeal College of Business Managerial Accounting: ACCTG 404 Pennsylvania State University Professor Huddart 1. What is Management Accounting? Purpose is to provide information to allow users to make better
1. Which one of the following is assigned to goods that were either purchased or manufactured for resales? a. Relevant cost b. Period cost c. Product cost d. Opportunity cost 2. Which one of the following
LEMBAGA PIAWAIAN PERAKAUNAN MALAYSIA MALAYSIAN ACCOUNTING STANDARDS BOARD MASB Standard 2 Inventories Any correspondence regarding this Standard should be addressed to: The Chairman Malaysian Accounting
Cycle of costing accounting IDENTIFY THE PRODUCT PRDUCT SPECIFICATION I DENTIFICATION Resources used in producing the product Cost valuation Materials cost s Labor cost s Over head cost s Costs classification
QUESTION BANK PAPER: COST ACCOUNTING COURSE: B.Com (Semester IV) MCQs 1. The basic objective of cost accounting is a) Recording of cost b) Reporting of cost c) Cost control d) EarningProfit 2. Standard
REVISION: MANUFACTURING 12 SEPTEMBER 2013 Lesson Description In this lesson we: Revise ledger accounts and the production cost statement Key Concepts Ledger Accounts for Manufacturing Differences between
An Introduction to Cost Terms and Purposes Dr. Osama Al Meanazel Lecture 5 Other Cost Concepts Cost driver a variable that causally affects costs over a given time span Relevant range the band of normal
Introduction: - Product costing Systems are used to compute the product cost per unit. - Product cost per unit is needed for a variety of purpose: o In financial accounting; Used to value inventory and
Current Quiz MGT 402 Solved by Atif Ghafoor For more help contact with at (email@example.com) Page 1 Of the following manufacturing operations, which is the best suited to the utilization of a job order
Examination No. THE PUBLIC ACCOUNTANTS EXAMINATION COUNCIL OF MALAWI 2009 EXAMINATIONS FOUNDATION STAGE PAPER 3 : MANAGEMENT INFORMATION WEDNESDAY 9 DECEMBER 2009 TIME ALLOWED : 3 HOURS 9.00 AM - 12.00
GLOSSARY A Absorption (or full) costing. A method of accounting for manufacturing costs that charges both fixed and variable costs to the product. Account analysis method. See Observation method. Accounting
Chapter 02 - Cost Concepts and Cost Allocation Student: 1. Product costs for a manufacturing company consist of direct materials, direct labor, and overhead. 2. Period cost and product cost are synonymous
Chapter 02 - Cost Concepts and Cost Allocation Student: 1. Product costs for a manufacturing company consist of direct materials, direct labor, and overhead. 2. Period cost and product cost are synonymous
Session Objectives Topic 4 Inventory Understand the need for adjustment for inventory in preparing financial statements Describe how opening and closing inventory appears in the profit and loss accounts
Learning Objectives BUS 211 Fall 2014 Topic 1: Introduction Not applicable Topic 2: Accounting Information for Decision Making and Control State and describe each of the 4 items in the planning and control
A. Chapter 14 (Managerial Accounting). 1. Purposes and Principles. (Page 632) REVIEW FOR EXAM NO. 1, ACCT-2302 (SAC) (Chapters 14-16) a. Provides economic/financial information (both historical and estimated)
1 MULTIPLE CHOICE 1-2 I certify that I am taking this assessment alone and that I am receiving no help with it except through the use of my textbook and notes. I have not been given the questions in advance.
Assignment - 1 F5 - Performance Management Mr. Ghan Name - Student ID - E-mail ID - Date Submitted - Date Returned - MARK - % MARKER COMMENTS (including areas for improvement) 1. The following statements
Chapter 02 Cost Concepts and Behavior True / False Questions 1. The cost of an item is the sacrifice of resources made to acquire it. True False 2. An expense is a cost charged against revenue in an accounting
FINANCIAL STATEMENTS Key Topics to Know Cost of good sold statement is prepared from the finished goods inventory account. Cost of goods sold statement has the same format as in financial accounting. Cost
Accounting for Manufacturing 1 Accounting for Manufacturing and Inventory Impairments TABLE OF CONTENTS Accounting for manufacturing 2 Production activities 2 Production cost flows 3 Accounting for production
Test Bank For Cost Accounting A Managerial Emphasis Fifth Canadian 5th Edition By Horngren Foster Datar And Gowing Link full download: https://digitalcontentmarket.org/download/test-bank-for-cost-accounting-amanagerial-emphasis-fifth-canadian-5th-edition-by-horngren-foster-datar-andgowing/
IAS Standard 2 Inventories In April 2001 the International Accounting Standards Board (the Board) adopted IAS 2 Inventories, which had originally been issued by the International Accounting Standards Committee
Using Data Analytics in Audits Data Analytics is the process of inspecting, cleansing, transforming and modelling raw data with the purpose of discovering useful information, drawing conclusions and supporting
The workings under the heading of Additional Working are not required according to the requirement of the examiner. These are only for understanding the solutions. For more help, visit 2014 B.COM II COST
This document describes the intended features and technology for TRAVERSE 11 as of August, 2016. Features and technology are subject to change and there is no guarantee that any particular feature or technology
Exercise 3-12 1. The overhead applied to Ms. Miyami s account would be computed as follows: 2002 2001 Estimated overhead cost (a)... $144,000 $144,000 Estimated professional staff hours (b)... 2,250 2,400
Inventory and Cost of Goods Sold E DWIN R ENÁN MALDONADO C AT EDRÁTICO U PR R I O P I EDRAS S EG. S EM. 2 017-18 Textbook: Financial Accounting, Spiceland This presentation contains information, in addition
MGT402 Cost Accounting Which of the following statement measures the financial position of the entity on particular time? Income Statement Balance Sheet Cash Flow Statement Statement of Retained Earning
Chapter 7 Condensed (Day 1) I. Valuing and Cost of Goods Sold (COGS) II. Costing Methods: Specific Identification, FIFO, LIFO, and Average Cost III. When managers use FIFO, LIFO, and Average Cost IV. Lower-of-Cost-or-Market
International Accounting Standard 2 Inventories Objective 1 The objective of this Standard is to prescribe the accounting treatment for inventories. A primary issue in accounting for inventories is the
1). Fixed cost per unit decreases when: a. Production volume increases. b. Production volume decreases. c. Variable cost per unit decreases. d. Variable cost per unit increases. 2). Prime cost + Factory
Certified Accounting Technician Examination Intermediate Level Accounting for Costs Thursday 10 December 2009 Time allowed: 2 hours This paper is divided into two sections: Section A ALL 20 questions are
Multiple Choice Questions 1. A cost not relevant to deciding whether to purchase a new machine is: a) The cost of the new machine b) Lower maintenance costs for the new machine c) The cost of the old machine
Instructor Michael Brownlee B.Comm(Hons),CGA Course AU1 Module 9: Inventory and property, plant, and equipment balances, production and payroll cycles, and finance and investment cycle New cycles...same
JOB ORDER COSTING Terms Cost Accounting Process Cost System Job Order Cost System LO 1: Cost Systems Job-Order Costing Used for custom or unique items Each job is accounted for separately Measures cost
Solution Manual for Cost Accounting Foundations and Evolutions 8th Edition by Kinney and Raiborn Link full download of Solution Manual: https://digitalcontentmarket.org/download/solution-manual-for-costaccounting-foundations-and-evolutions-8th-edition-by-kinney-and-raiborn/
PROCESS COSTING FIRST-IN FIRST-OUT METHOD Key Terms and Concepts to Know Differences between Job-Order Costing and Processing Costing Process costing is used when a single product is made on a continuous
EXAMINATION NO. THE PUBLIC ACCOUNTANTS EXAMINATION COUNCIL OF MALAWI 2013 EXAMINATIONS FOUNDATION STAGE PAPER 3 : MANAGEMENT INFORMATION WEDNESDAY 4 DECEMBER 2013 TIME ALLOWED : 3 HOURS 9.00 AM - 12.00
117 Chapter 15 Measuring and Assigning Costs for Income Statements LEARNING OBJECTIVES Chapter 15 addresses the following objectives: LO1 Prepare absorption and variable costing income statements and reconcile
COST OF GOODS MANUFACTURED & SOLD STATEMENT In order to understand the financial and cost statement of a concern we should clear about the procedure adopted by trading concern and manufacturing concern
!! www.clutchprep.com CONCEPT: MERCHANDISING COMPANY VS MANUFACTURING COMPANY A merchandising company has Inventory account. Merchandisers goods manufactured by others. The Inventory account might also
CA R. K. Mehta Overheads/Job and Batch Costing CA Past Years Exam Question Question : 1 Nov, 2006 RST Ltd. has two production departments Machining and Finishing. There are three service departments Human
Chapter 2 Cost Concepts and Behavior rue/false Questions F 1. he cost of an item is the sacrifice made to acquire it. Answer: rue Difficulty: Simple Learning Objective: 1 F 2. A cost can either be an asset
Chapter 2--Cost Terminology and Cost Behaviors Student: 1. A cost object is anything for which management wants to collect or accumulate costs. 2. A production plant could be a cost object. 3. A specific
The Examiner's Answers Specimen Paper P2 - SECTION A Answer to Question One The Value Chain is the concept that there is a sequence of business factors by which value is added to an organisation s products
Seradex White Paper A Discussion of Issues in the Manufacturing OrderStream Lean Accounting Lean Manufacturing and the General Ledger Lean has been applied very successfully to the shop floor with admirable