Manufacturing Operations

45問 • 1年前

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Differentiate merchandising and manufacturing entities

merchandiser - normally buys a product that is ready for resale when it is received manufacturer - vice raw materials and processes them into finished goods that it sells to customers

What are the three elements of manufacturing costs?

direct materials direct labor manufacturing overhead

These materials become a physical part of a finished product.

direct materials

Their costs can be conveniently and economicly traceable to the finished product.

direct materials

It is the compensation of employees or workers who physically convert raw materials into finished goods.

direct labor

The efforts of these persons are directly traceable to the finished product.

direct labor

This includes all manufacturing costs that cannot be classified as direct materials or direct labor.

manufacturing overhead

Classification of: Indirect materials and supplies. Glue, thread, nails, rivets, lubricants, and small tools.

manufacturing overhead

Classification of: indirect labor costs. Salaries of plant managers and engineers, wages of forklift operators, maintenance and inspection labor, and machine helpers.

manufacturing overhead

Classification of: other indirect manufacturing costs. Includes building, machinery and tool maintenance, real property taxes, property insurance, rent expense, utilities expense, and depreciation.

manufacturing overhead

The major cost elements of manufacturing are at times combined into ____ or ____.

prime costs or conversion costs

Cost element that consists of direct materials and direct labor.

prime costs

Cost element that consists of direct labor and manufacturing overhead.

conversion costs

What are the manufacturing inventory accounts?

finished goods inventory work in process inventory raw materials inventory factory supplies inventory

Need only one category of inventory for the finished goods they buy and sell.

merchandisers

It is the cost of completed goods that have remained unsold at the end of accounting period.

finished goods inventory

This inventory is what the manufacturer sell to the merchandisers.

finished goods inventory

This account gets the cost of a goods that are in the manufacturing process but are not yet complete at the end of accounting period.

work in process inventory

This account holds the cost of direct materials on hand that is intended for use in the manufacturing process.

raw materials inventory

It is the cost of unused indirect materials at the period end.

factory supplies inventory

What are the two accounting systems that may be used in accounting for manufacturing activities?

cost system and non-cost system

Keeps perpetual records of the costs of raw material, work in process and finished goods inventory.

cost system

This system provides more timely information about those inventories and changes in their levels.

cost system

This system produces timely information about manufacturing costs per unit of product which managers use in their efforts to control costs.

cost system

Produces a manufacturing accounting system based on the periodic inventory system.

non-cost system

The costs of raw materials, work and process and finished goods inventories are based on physical counts of the quantities on hand at the end of each period.

non-cost system

This system does not provide for a detailed flow of costs in the manufacturing process.

non-cost system

To record purchase of raw materials and indirect materials on account.

Purchases–raw Materials Indirect Materials Vouchers Payable

To record cost of defective raw materials returned to vendor.

Vouchers Payable Purchases Returns and Allowances

Record payment of account within the discount period.

Vouchers Payable Purchases Discounts Cash in Bank

The record freight and handling of raw materials.

Transportation In Vouchers Payable

The record payroll for factory employees.

Direct Labor Indirect Labor SSS Contributions Payable Medicare Contributions Payable Pag-IBIG Contributions Payable Withholding Taxes Payable Vouchers Payable

The record employer's payroll expenses.

Employer's Payroll Contributions–Factory SSS Contributions Payable Medicare Contributions Payable EC Contributions Payable Pag-IBIG Contributions Payable

To record distribution of payroll.

Vouchers Payable Cash in Bank

To record accrual of factory payroll.

Direct Labor Indirect Labor Accrued Payroll

To record depreciation of factory building.

Depreciation Expense–factory Building Accumulated Depreciation–Fac.Bldg.

The record repairs on factory building.

Repairs and Maintenance–Factory Bldg. Vouchers Payable

To record amortization of patents.

Amortization Of Patents Patent

To record real property taxes on factory site.

Real Property Taxes Vouchers Payable

To record factory utilities incurred.

Factory Utilities Vouchers Payable

To record cost of tools used.

Tools Used Tools

To record sales of finished goods.

Accounts Receivable Sales

To record sales returns of customers.

Sales Returns and Allowances Accounts Receivable

In order for a manufacturer to summarize all transactions that affect the computation of the cost of goods manufactured, a ________ account is maintained.

manufacturing summary account

Are the costs of direct materials used, direct labor and manufacturing overhead incurred and charged to production during an accounting period.

total manufacturing costs

Business Finance

Sab Sescon · 46問 · 2年前

Business Finance