1. Accounting for Manufacturing Business Lecture 25

2. Lecture Overview Cost, Product Cost, Period Cost Components of Manufacturing Products Cost of Good Manufactured Cost of Goods Sold Manufacturing Cost Flows Income Statements

3. Manufacturing Costs – Direct Material Raw Material, can be traced out in finished products – Direct Labor Salaries, wages, fringe benefits for people directly working on production – Manufacturing Overheads Indirect material – Insignificant to trace i.e. Cost of drill bits, glue, nails, indirect labor – Deptt supervisors, security guards etc and other manufacturing overheads. – Depreciation of plant and machinery, property taxes, insurance, electricity, gas etc.

4. Manufacturing Cost Flows

5. Following data refer to Company XYZ for the year 2008. Prepare income statement for the year 2008 Sales revenue950000 Work-in-process inventory, December 3130000 Work-in-process inventory, December 0140000 Selling and administrative expenses150000 Income tax expense40% Purchase of raw material180000 Raw-material inventory, December 3125000 Raw-material inventory, December 0140000 Direct labor200000 Utilities, plant40000 Depreciation: plant and equipment60000 Finished goods inventory, December 3150000 Finished goods inventory, December 0120000 Indirect material10000 Indirect labor15000 Other manufacturing overhead80000

7. Following data refer to Company XYZ for the year 2008. Prepare income statement for the year 2008 Sales revenue950000 Work-in-process inventory, December 3130000 Work-in-process inventory, December 0140000 Selling and administrative expenses150000 Income tax expense40% Purchase of raw material180000 Raw-material inventory, December 3125000 Raw-material inventory, December 0140000 Direct labor200000 Utilities, plant40000 Depreciation: plant and equipment60000 Finished goods inventory, December 3150000 Finished goods inventory, December 0120000 Indirect material10000 Indirect labor15000 Other manufacturing overhead80000

9. Following data refer to Company XYZ for the year 2008. Prepare income statement for the year 2008 Sales revenue950000 Work-in-process inventory, December 3130000 Work-in-process inventory, December 0140000 Selling and administrative expenses150000 Income tax expense40% Purchase of raw material180000 Raw-material inventory, December 3125000 Raw-material inventory, December 0140000 Direct labor200000 Utilities, plant40000 Depreciation: plant and equipment60000 Finished goods inventory, December 3150000 Finished goods inventory, December 0120000 Indirect material10000 Indirect labor15000 Other manufacturing overhead80000

11. Journal Entries

13. Closing Entries

14. Practice Question

15. Following data refer to Company ABC for the year 2008. Prepare income statement for the year 2008 Sales revenue 1105000 Work-in-process inventory, December 31115000 Work-in-process inventory, December 01120000 Selling and administrative expenses110000 Income tax expense40% Purchase of raw material250000 Raw-material inventory, December 3170000 Raw-material inventory, December 0160000 Direct labor400000 Utilities, plant25000 Depreciation: plant and equipment100000 Finished goods inventory, December 31150000 Finished goods inventory, December 01165000 Indirect material10000 Indirect labor25000 Other manufacturing overhead30000

16. Lecture Overview Practice Questions Manufacturing cost Flows Journal Entries

17. End of Lecture 25