Differentiation

of Firm
Manufacturing Firm
Activity : Buy raw materials
and converted into finished
goods for resale.
Trading Firm
Activity : Buy finished goods
from supplier and resell to
customer.
Example Accounts :
1) Manufacturing Accounts
2) Trading Account
3) Profit and Loss Account
4) Balance Sheet
Example Accounts :
1) Trading Account
2) Profit and Loss Account
3) Balance Sheet

Production Cost :
- Is the sum of prime cost and factory overhead.
Elements of Production Cost :






PRODUCTION
COST
Prime Cost
Production
Overhead
Direct Material Direct Labor
Direct
Expenses