Cost Accounting-I Recording System

What is Cost Accounting? Cost accounting is a quantitative method that accumulates, classifies, summarizes and interprets information for three major purposes, operational planning and control, making decision and product decision process.

What is Cost Accounting? Cost accounting process involves collecting, analyzing, summarizing and evaluating various alternative courses of action.

The Place of Cost Accounting in Accounting Information System Financial Accounting Management Accounting Cost Accounting Cost accounting involve both recording, evaluating and calculating techniques in calculating total and unit costs.

Cost Accounting Recording System Uniform Accounting System (Uniform Chart of Accounts) Balance Sheet Accounts (1-5) Cost Accounts (7/A-7/B) Other Accounts Income Statement Accounts (6) The costs are to be recorded alternatively on the basis of function (7/A) or nature (7/B) acc. to Uniform Accounting System. 7/A accounts classify costs by their function and 7/B by their nature.

Cost Accounting Recording System Uniform Accounting System (Uniform Chart of Accounts) Balance Sheet Accounts (1-5) Cost Accounts (7/A-7/B) Other Accounts Income Statement Accounts (6) In Turkey, 7/A alternative is commonly used in recording costs. In 7/A accounts has been grouped according to function as; production costs and period costs.

Cost Accounting Recording System 7/A Costs Production Costs 710. Direct Material 711. Direct Material Applied 720. Direct Labor 721. Direct Labor Applied 730. Manufacturing (Factory) Overhead 731. Manufacturing Overhead Applied 740. Service Costs 741. Service Costs Applied Period Costs 750. Research and Development Costs 751. Research and Development Costs Applied 760. Marketing Selling and Distributing Costs 761. Marketing Selling and Distributing Costs Applied 770. General Administrative Costs 771. General Administrative Costs Applied 780. Finance Costs 781. Finance Costs Applied Cost Accounting Recording System 7/A Balance Sheet or Income Statement 151. Work-in Progress 152. Finished Goods 620. Cost of Goods Sold Income Statement 622. Service Costs 630. Research and Development Costs 631. Marketing Selling and Distributing Costs 632. General Administrative Costs 660. Finance Costs

Cost Accounting Recording System 7/B Costs By Nature 790. Material Costs 798. Costs By Nature Applied 799. Product Costs 151. Work-in Progress 791. Labor Costs 152. Finished Goods 792. Wages and Salaries 793. Utility Costs 794. Other Cost and Expenses 795. Tax and Duties Costs 796. Amortization and Depreciation Costs

Cost Accounting Recording System 7/B Costs Product Costs 790. Material Costs 791. Labor Costs 792. Wages and Salaries 793. Utility Costs 794. Other Cost and Expenses 795. Tax and Duties Costs 796. Amortization and Depreciation Costs Period Costs 797. Finance Costs Balance Sheet or Income Statement 151. Work-in Progress 152. Finished Goods 620. Cost of Goods Sold Income Statement 622. Service Costs 630. Research and Development Costs 631. Marketing Selling and Distributing Costs 632. General Administrative Costs 660. Finance Costs

BÖLÜM 1: Örnek Storyboard METİN GÖRSEL

PRODUCT (MANUFACTURING) COSTS Cost Flow Reporting Cost Items in Financial Statements Balance Sheet Income Statement Assets Liabilities PRODUCT (MANUFACTURING) COSTS Inventories Sales Cost of Goods Sold Tangible Assets Gross Sales INVESTMENT COSTS Intangible Assets Operating Costs Operating Profit/Loss Other Income and Profit Other Expense and Loss PERIOD COSTS Finance Costs

STATEMENT OF COST OF GOODS SOLD TL Cost Of Direct Material (+)   Cost Of Beginning Raw Material (+) Net Purchases (+) Cost Of Ending Raw Material (-) Direct Labor Wages (+) Factory Overheads (+) Indirect Materials Indirect Labor Depreciation On Factory Building Depreciation On Factory Equipment Insurance Repairs And Maintenance Other Factory Overheads   Current Period’s Total Cost Work-in-progress (Beginning) (+) Work-in-progress (Ending) (-) Current Period’s Cost of Finished Goods Finished Goods (Beginning) (+) Finished Goods (Ending) (-) Cost of Goods Sold

Cost Accounting Recording System Example- Cost Accounting Recording System A manufacturing company completed the following transactions during May. The company purchased raw materials for TL 200 and operating supplies for TL 100 on credit. 50 TL of raw material and 20 TL of operating supplies were issued to main production center. Also, operating supply consumption was 10 TL for maintenance and repair cost center. Accrued direct labor cost was 30 TL and indirect labor cost was 10 TL for main production center for the month of May. Depreciation cost of May was 6 TL for factory building, 4 TL for assembly machines, 2 TL for office building and 3 TL for store.

Cost Accounting Recording System Example- Cost Accounting Recording System Beginning inventory of work-in progress was 30 TL and account balance is 40 TL at the end of May. 2.000 units of product were completed in May and moved to warehouse. 1.000 units of goods in warehouse were sold at a price which is cost plus 30% profit margin on account. Requested: Do the journal and ledger entries according to 7/A. Ascertain total and unit cost. Prepare the statement of cost of goods sold. Prepare Statement of Cost of Sales, and calculate gross profit of sales.