UTS ACCOUNTING MANUFACTURES
What is Manufacturing Company?
Manufacturing companies are companies
that have activities such as buying raw
materials and then processing raw
materials by incurring other costs into
finished goods that are ready to be sold.
One part of a manufacturing company in
Indonesia is usually called a factory. The
factory is a place for the manufacturing
process.
Companies are divided into 3 types of
companies based on business, namely :
1. Trading companies
2. Manufacturing companies
3. Service Companies
The three types of companies based on the
business used have different financial
records and accounting forms.
Explanantion the difference between a
trading company, a manufacturing
company, and a service company.
What is Trading Company/ Commercial
Enterprise?
Trading Company/ commercial enterprise
is a company that sell products/inventory
goods to consumers.Trading companies do
not produce their own goods but take
or buy products/inventory goods from
suppliers in the form of finished
materials. Trading Company aims to resell
products/goods that have been taken from
suppliers without changing the
original form and get profit from the
difference in sales made.
Some of the differences in trading
companies compared to other types of
companies can be seen as follows:
1. There is a Cost of Production
(HPP) so that it is easy to
determine the cost of goods
2. There is stock of finished goods
inventory
3. In a trading company, the report on
the cost of production is not used
and there are no accounting costs in
it.
Service Company
Service Company is a company that does
not produce and produce goods or a
product. Therefore, service companies
do not have any inventory to be marketed
or sold to consumers. The service
company itself sells products that are
intangible as is the case with trading
companies and manufacturing companies
or it can be said that sales are in the form
of services to the company itself.
The application of service companies aims
to obtain predetermined profits.In the
production or sale process at a service
company there must be an agreement
between the company and the consumers
involved. There are two main transactions
carried out by service companies, namely
administrative transactions and the sale of
existing services.
Some of the differences in service
companies compared to other types of
companies can be seen as follows:
1. No need to determine the cost of
goods and no need to make a report
on the cost of production so
there are no accounting costs in it
2. There is no inventory of any goods
because what is being sold is in the
form of services
 3. Purchases that occur will be
directly entered into the equipment
account or equipment account
Manufacturing Company
Manufacturing companies or commonly
called factories are companies that produce
raw materials into semi-finished
goods/products or into finished
goods/products to then be sold to
consumers. So, goods that are processed
from raw raw materials into finished goods
can be said to be goods / inventory
products at the manufacturing company.
Manufacturing companies themselves
process raw materials into finished
products not only for their own
companies because sometimes
manufacturing companies process raw
materials to be given to other
companiesManufacturing companies have
a goal to produce goods/finished products
that have high quality and selling value
so that business profits can be obtained.
Some of the differences in manufacturing
companies compared to other types of
companies can be seen as follows:
1. There is a Cost of Production
(HPP) and to determine the cost of
goods, several stages of calculation
are carried out
2. There is an inventory of raw/raw
materials and supplies of auxiliary
materials in the production process
3. In manufacturing companies must
make a report on the cost of
production and there are
accounting costs in it.
Definitions of Manufacturing Company
According to Manufacturing Experts
Manufacturing Company is a processing of
raw materials through chemical and
physical processes to change a shape,
nature or appearance to make components
or products.
According to Experts in Economics
Manufacturing company is a process of
transforming raw materials into a form that
has an added value through one or more
operations or also an assembly process so
that it has a selling value.
According to CIRP 1983
company is a series of activities that
include a product design, selection of
goods, planning, manufacturing
(manufacturing), quality assurance,
management and sales carried out by the
company.
Characteristics of Manufactaring
Companies
Below are some of the characteristics of a
manufacturing company, including:
• Product Processing
• Large-Scale Machine
• Production cost
• Production process
• Marketing and Sales
Product Proscessing
The company's activities are carried out by
processing raw materials into finished
goods, where the process requires
considerable time and energy. The finished
goods are then sold to consumers through
the marketing process.
Large-Scale Machine
Production activities in manufacturing
companies use machines and equipment on
a large scale in managing the production
process in order to obtain a product in a
certain quantity and certain quality.
However, production activities still require
professional human resources to manage
these machines and equipment.
Production Cost
In order to obtain high-quality finished
products in large quantities, large costs are
required to assist production activities.
These costs are for the supply of raw
materials, labor costs, machine
maintenance and so on.
Although the production costs in this
industry are very large, the profit that can
be obtained is also very large.
Production Process
Production activities in manufacturing
companies are usually very complete, thus
requiring a good division of tasks and
organization between divisions. For
example, the machine operator works to
ensure the machine works according to its
function, while the quality control
department works to ensure that the
product obtained is in accordance with the
SOP and is suitable for sale to the market.
Marketing and Sales
Production activities will be closely related
to the process of marketing and selling
products. Without good marketing and
sales, the production process will have
problems.
Manufacturing companies usually carry
out various kinds of marketing efforts as
much as possible so that sales of their
products increase rapidly. In fact,
companies often incur large costs to carry
out promotional activities so that their
products are better known to the public
and attract consumers to buy.
Manufacturing Company Functions
Below are some of the functions of a
manufacturing company, including:
1. Production Function
2. Marketing Function
3. Administration and General
Functions
4. Finance Function
Production Function
At this stage, the manufacturing company
performs its functions. The function of a
manufacturing company is to process raw
materials into finished goods. One of the
manufacturing companies that carry out its
functions is the FURNITURE company. In
companies that convert wood into various
property goods, in furniture companies
where initially wood cannot be used by
consumers directly other than being
firewood. mabel companies can turn wood
into properties such as chairs, tables, doors
and so on.
Marketing Function
A company would want a profit as much
as possible from the sale of the products
they have. Therefore, a company must
market their products so that their products
are known by the wider community and
increase sales. And the purpose of
marketing is to get as much profit as
possible. there is no company that does not
want to do marketing, because marketing
is the spearhead of every company to
increase sales.
Administration and General Function
The General and Administration function
is a function of the manufacturing
company's activities related to determining
the company's policy of direction and
supervision to be more effective and
efficient.
Finance Function
The function of finance is to support or
regulate company finances in order to be
able to overcome competition in the
business world. Because in the business
world there is usually a price competition.
Manufacturing Company Activities
In accordance with its meaning, the main
operational activity of a manufacturing
company is to carry out production
activities, namely processing raw materials
or raw goods into semi-finished goods or
finished goods. Without a production
process, a manufacturing company cannot
run.
Financial Recording in Manufacturing
Companies:
Below are some financial records in
manufacturing companies, including:
• Production cost
• Calculation of Cost Production
• Cost of goods sold
Production Cost
The costs absorbed in the production
process of a manufacturing company
consist of three elements, namely the cost
of raw materials, labor, and factory
overhead costs (BOP). Raw material costs
are costs incurred due to the use of raw
materials as the main material that is
processed to produce a product.
Calculation of Cost Production
Cost of Production is a calculation of the
cost of using raw materials, labor
materials, and factory overhead attached to
a product. The calculation of the cost of
production is needed to determine how
much the total cost of production has been
burdened on a product that has been
produced. So that the costs that have been
absorbed can be replaced through the
selling price of the product which is
calculated through the cost of goods sold.

Cost of Goods Sold

In addition to having the cost of
production, manufacturing companies also
have a calculation of the cost of goods
sold. Cost of Goods Sold is the calculation
of production costs and other costs
absorbed in semi-finished goods and
finished goods, plus the value of the initial
inventory of the product and minus the
value of the ending inventory of the
product The point is that the company can
determine the selling price of the product
correctly so that it does not suffer losses.

Example of a Manufacturing Company

Below are some examples of

manufacturing companies, including:
• Textile Manufacturing Industry
• Garment Manufacturing Industry
• Automotive Manufacturing
Industry