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    Chapter 14 Fill-In Notes

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    lowell Moore
    Here is the cost of goods manufactured schedule for Keystone Company for March 2020: Cost of Goods Manufactured Schedule for the month ended March 31, 2020 Raw Materials, March 1 $12,000 Add: Materials Purchased in March 90,000 Total Materials Available 102,000 Less: Raw Materials, March 31 10,000 Materials Used 92,000 Direct Labor 75,000 Manufacturing Overhead 220,000 Total Manufacturing Costs 387,000 Add: Work in Process, March 1 2,500 Costs of Goods Manufactured 389,500 Less: Work in Process, March

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    Chapter 14 Fill-In Notes

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    lowell Moore
    57 views5 pages
    Here is the cost of goods manufactured schedule for Keystone Company for March 2020: Cost of Goods Manufactured Schedule for the month ended March 31, 2020 Raw Materials, March 1 $12,000 Add: Materials Purchased in March 90,000 Total Materials Available 102,000 Less: Raw Materials, March 31 10,000 Materials Used 92,000 Direct Labor 75,000 Manufacturing Overhead 220,000 Total Manufacturing Costs 387,000 Add: Work in Process, March 1 2,500 Costs of Goods Manufactured 389,500 Less: Work in Process, March

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    Here is the cost of goods manufactured schedule for Keystone Company for March 2020: Cost of Goods Manufactured Schedule for the month ended March 31, 2020 Raw Materials, March 1 $12,000 Add: Materials Purchased in March 90,000 Total Materials Available 102,000 Less: Raw Materials, March 31 10,000 Materials Used 92,000 Direct Labor 75,000 Manufacturing Overhead 220,000 Total Manufacturing Costs 387,000 Add: Work in Process, March 1 2,500 Costs of Goods Manufactured 389,500 Less: Work in Process, March

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    57 views5 pages

    Chapter 14 Fill-In Notes

    Uploaded by

    lowell Moore
    Here is the cost of goods manufactured schedule for Keystone Company for March 2020: Cost of Goods Manufactured Schedule for the month ended March 31, 2020 Raw Materials, March 1 $12,000 Add: Materials Purchased in March 90,000 Total Materials Available 102,000 Less: Raw Materials, March 31 10,000 Materials Used 92,000 Direct Labor 75,000 Manufacturing Overhead 220,000 Total Manufacturing Costs 387,000 Add: Work in Process, March 1 2,500 Costs of Goods Manufactured 389,500 Less: Work in Process, March

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    © All Rights Reserved
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    of 5

    Chapter 14: Managerial Accounting

    Objective 1: Identify the features of managerial accounting and the functions of


    management.
    Managerial accounting provides economic and financial information for _________________
    __________________________________________.

    Objective 2: Describe the classes of manufacturing costs and the differences between
    product and period costs.

    Manufacturing consists of activities and processes that convert raw materials into finished
    goods.

    There are 3 types of manufacturing (product) costs:


    1) Direct Materials - ___________________ that can be physically and directly associated with
    the finished product during the manufacturing process.

    2) Direct Labor - _____________________________________________ that can be


    physically and directly associated with converting raw materials into finished goods.

    3) Manufacturing Overhead - Costs that are ______________________________________


    the finished product. Includes all manufacturing costs except direct materials and direct labor.
    Also called factory overhead, indirect manufacturing costs, or burden.

    Indirect Materials (Considered Manufacturing Overhead)


    ________________________________________________________________ to the
    finished product because their physical association with the finished product is too small
    in terms of cost. Considered part of manufacturing overhead.

    Indirect Labor (Considered Manufacturing Overhead)


    Work of factory employees that has no physical association with the finished product or
    for which it is impractical to trace costs to the goods produced.
    Product Versus Period Costs:

    P ro d u c t C o s ts P e rio d C o s ts
     D ire c t m a te ria ls
     C h a rg e d to e x p e n s e a s in c u rre d .
     C o m p o n e n ts :  D ire c t la b o r
     M a n u fa c tu r in g o v e rh e a d  N o n -m a n u fa c tu rin g c o s ts .

     C o s ts th a t a re a n in te g ra l p a rt o f p ro d u c in g th e  In c lu d e s a ll s e llin g a n d a d m in is tra tiv e e x p e n s e s .

    p ro d u c t.

     R e c o rd e d in “in v e n to ry ” a c c o u n t.

     N o t a n e x p e n s e (C O G S ) u n til th e g o o d s a re s o ld .

    Illustration: Suppose you started your own snowboard factory, Terrain Park Boards. Here are
    some of the costs that your snowboard factory would incur. Assign the following costs:
    If Terrain Park Boards produces 10,000 snowboards the first year, what would be the total
    manufacturing costs?

    Practice Exercise:
    A bicycle company has these costs: tires, salaries of employees who put tires on the wheels,
    factory depreciation, advertising expenditures, lubricants, spokes, salary of factory manager,
    salary of accountant, handlebars, and salaries of factory maintenance employees. Classify each
    cost as direct materials, direct labor, overhead, or a period cost.

    D ir e c t M a te r ia ls D ir e c t L a b o r O verh ead

     T ire s .  S a la rie s o f  F a c to ry d e p re c ia tio n .


     S pokes. e m p lo y e e s w h o p u t  L u b ric a n ts
    tire s o n th e w h e e ls .
     H a n d le b a rs .  F a c to ry m a n a g e r
    s a la ry.
    A d v e rtis in g e x p e n d itu re s a n d s a la ry  F a c to ry m a in te n a n c e
    o f a c c o u n ta n t a re p e r io d c o s ts . e m p lo y e e s s a la ry.

    Objective 3: Demonstrate how to compute cost of goods manufactured and prepare


    financial statements for a manufacturer.

    Income Statement - Under a periodic inventory system, the income statements of a


    merchandiser and a manufacturer differ in the cost of goods sold section (AKA "COGS").

    .
    Example comparison:

    For a manufacturing company, the Cost of Goods Manufactured is calculated as follows:

    Total Manufacturing Costs – ___________________________________________________

    ____________________________________________________________________________

    Total Work in Process – ___________________________________________________

    ____________________________________________________________________________

    At the end of a period, manufacturing companies may prepare the Cost of Goods Manufactured
    Schedule to show the activity in the Work in Process account. Example:
    Balance Sheet
     The balance sheet for a merchandising company shows____________________
    ________________________________________.

     Inventory accounts for a manufacturer show the following:

    Example comparison:
    Current assets sections of merchandising and manufacturing balance sheets

    Practice Exercise:

    The following information is available for Keystone Company.


    blank blank March 1 March 31
    Raw materials inventory blank $12,000 $10,000
    Work in process inventory blank 2,500 4,000
    Materials purchased in March $90,000 blank blank
    Direct labor in March 75,000 blank blank
    Manufacturing overhead in March 220,000 blank blank

    Prepare the cost of goods manufactured schedule for the month


    of March 2020.

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