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  • Include All Costs Related To The Production Process

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    Jamesu Gacia
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    This document provides an accounting tutorial on manufacturing costs, including definitions of direct materials costs, direct labor costs, and manufacturing overhead costs. It also presents inventory account information and operating cost data for Super Michelle Manufacturing Company for 2019, and requests calculations of various manufacturing costs for the year. Specifically, it asks the reader to: 1) compute direct materials used, 2) compute overhead costs, 3) compute prime, conversion, and total manufacturing costs, 4) compute cost of goods manufactured, 5) compute cost of goods sold, and 6) prepare a statement of cost of goods manufactured for 2019.

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    This document provides an accounting tutorial on manufacturing costs, including definitions of direct materials costs, direct labor costs, and manufacturing overhead costs. It also presents inventory account information and operating cost data for Super Michelle Manufacturing Company for 2019, and requests calculations of various manufacturing costs for the year. Specifically, it asks the reader to: 1) compute direct materials used, 2) compute overhead costs, 3) compute prime, conversion, and total manufacturing costs, 4) compute cost of goods manufactured, 5) compute cost of goods sold, and 6) prepare a statement of cost of goods manufactured for 2019.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    32 views2 pages

    Include All Costs Related To The Production Process

    Uploaded by

    Jamesu Gacia
    This document provides an accounting tutorial on manufacturing costs, including definitions of direct materials costs, direct labor costs, and manufacturing overhead costs. It also presents inventory account information and operating cost data for Super Michelle Manufacturing Company for 2019, and requests calculations of various manufacturing costs for the year. Specifically, it asks the reader to: 1) compute direct materials used, 2) compute overhead costs, 3) compute prime, conversion, and total manufacturing costs, 4) compute cost of goods manufactured, 5) compute cost of goods sold, and 6) prepare a statement of cost of goods manufactured for 2019.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    of 2

    ACCOUNTING TURORIAL AND BRIDGING PROGRAM

    SESSION 5: MANUFACTURING
    NOVEMBER 14, 2020

    A manufacturer buys raw materials and processes them into finished goods that it sells to customers.

    Manufacturing Costs Raw Materials, beg. xx


    Purchases xx
    -include all costs related to the production process.
    Freight-in xx
    - costs that are conveniently and Purchase Returns and Discounts (xx)
    1. Direct Material economically traceable to the finished PRIME Total raw materials available for use xx
    product. (Cloth in a shirt) COSTS Raw Materials, end. (xx)
    – compensation of employees or workers Raw materials issued to production xx
    Work in process, beg. xx
    who physically convert raw materials into
    2. Direct Labor Direct Labor xx
    finished goods. (Machine Production Overhead xx
    operators/dressmaker) CONVERSION Total goods put into process xx
    COSTS Work in process, end. (xx)
    – costs that cannot be classified as direct
    Cost of goods manufactured xx
    3. Manufacturing materials or direct labor. (small Finished goods, beg. xx
    Overhead tools/thread/salaries of maintenance Total goods available for sale xx
    workers) Finished Goods, end. (xx)
    Cost of goods sold xx
    Manufacturing Inventory Accounts
    1. Raw Materials Inventory
    2. Work In Process Inventory
    3. Finished Goods Inventory
    4. Factory Supplies Inventory

    Problems:

    During 2019, P361, 920 of raw materials were purchased by Super Michelle Manufacturing Company. Operating
    cost data and inventory account balances for 2019 follow:

    Direct Labor (10, 430 hours at P9.50 per hour) 99, 085
    Plant Supervision 42, 500
    Indirect Labor (20, 280 hours at P6.25 per hour) 126, 750
    Factory Insurance 8, 100
    Factory Utilities 29, 220
    Depreciation-Factory Building 46, 200
    Depreciation - Factory Equipment 62, 800
    Manufacturing Supplies 9, 460
    Repairs and Maintenance 14, 980
    Selling and Administrative Expenses 76, 480
    Raw Materials Inventory, Jan. 1, 2019 26, 490
    Work in process Inventory, Jan. 1, 2019 101, 640
    Finished Goods Inventory, Jan. 1, 2019 148, 290
    Raw Materials Inventory, Dec. 31, 2019 24, 910
    Work In Process Inventory, Dec. 31, 2019 100, 400
    Finished Goods Inventory, Dec. 31, 2019 141, 100
    Provide the following requirements:

    1. Compute the cost of Direct Materials Used

    2. Compute the Overhead costs

    3. Compute the Prime Cost, Conversion Cost and the total Manufacturing Costs.

    4. Compute the cost of goods manufactured

    5. Compute the cost of goods sold

    6. Prepare the statement of Cost of Goods Manufactured for 2019.

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