Review. Ch 1 2. Review Ch.1. What are the basic differences in orientation between financial and managerial Accounting ?
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Ch 1 2
What are the basic differences in orientation between financial and managerial Accounting ?
Managerial accounting is concerned with providing information to managers for use within the organization. Financial accounting is concerned with providing information to stockholders, creditors, and others outside of the organization.
What are the major differences between financial and managerial accounting?
(1) funds tied up in inventories;
(2) space requirements;
(3) throughput time; and
2.Directing and motivating
7.Precision; Nonmonetary data
8.Managerial accounting; Financial accounting
12.Chief Financial Officer
a. Direct materials are an integral part of a finished product and their costs can be conveniently traced to it.
b. Indirect materials are generally small items of material such as glue and nails. They may be an integral part of a finished product but their costs can be traced to the product only at great cost or inconvenience. Indirect materials are ordinarily classified as manufacturing overhead.
c. Direct labor includes those labor costs that can be easily traced to particular products. Direct labor is also called “touch labor.”
d. Indirect labor includes the labor costs of janitors, supervisors, materials handlers, and other factory workers that cannot be conveniently traced to particular products. These labor costs are incurred to support production, but the workers involved do not directly work on the product.
e. Manufacturing overhead includes all manufacturing costs except direct materials and direct labor.
Beginning raw material Inventory $60000
Purchase for raw material $690000
Ending raw material Inventory $45000
Direct Labor $135000
Manufacturing overhead $370000
Beginning work in process Inventory $120000
Ending work in process Inventory $130000
Prepare a schedule of cost of goods Manufactured for the company for the month
Messinger Manufacturing Company had the following account balances for the quarter ending March 31, unless otherwise noted:
Work-in-process inventory (January 1) $ 140,400
Work-in-process inventory (March 31) 171,000
Finished goods inventory (January 1) 540,000
Finished goods inventory (March 31) 510,000
Direct materials used 378,000
Indirect materials used 84,000
Direct manufacturing labor 480,000
Indirect manufacturing labor 186,000
Property taxes on manufacturing plant building 28,800
Salespersons' company vehicle costs 12,000
Depreciation of manufacturing equipment 264,000
Depreciation of office equipment 123,600
Miscellaneous plant overhead 135,000
Plant utilities 92,400
General office expenses 305,400
Marketing distribution costs 30,000
a. Prepare a cost of goods manufactured schedule for the quarter.
b. Prepare a cost of goods sold schedule for the quarter.
a. Messinger Manufacturing Company Cost of Goods Manufactured Schedule for quarter ending March 31
Direct materials used$ 378,000
Direct manufacturing labor480,000
Depreciation of manufacturing equipment $264,000
Indirect manufacturing labor186,000
Miscellaneous plant overhead135,000
Property taxes on building28,800
Total Manufacturing overhead 790,200
Total Manufacturing costs incurred $1,648,200
Beginning work-in-process inventory 140,400
Add Total Manufacturing costs incurred $1,648,200
= Total work-in-process for the period $1,788,600
Less ending work-in-process inventory 171,000
= Cost of goods manufactured $1,617,600
b. Messinger Manufacturing Company
Cost of Goods Sold Schedule For the quarter ending March 31
Beginning finished goods inventory $ 540,000
Cost of goods manufactured 1,617,600
Cost of goods available for sale 2,157,600
Ending finished goods inventory (510,000)
Cost of goods sold $1,647,600