Bài giảng Financial & Managerial Accounting - Chapter 16: Management Accounting: A Business Partner

Direct Materials Raw materials & component parts that become an integral part of finished products. Can be traced directly and conveniently to products. If materials cannot be traced directly to products, the materials are considered indirect and are part of manufacturing overhead.

ppt33 trang | Chia sẻ: nguyenlinh90 | Lượt xem: 697 | Lượt tải: 0download
Bạn đang xem trước 20 trang tài liệu Bài giảng Financial & Managerial Accounting - Chapter 16: Management Accounting: A Business Partner, để xem tài liệu hoàn chỉnh bạn click vào nút DOWNLOAD ở trên
Management Accounting: A Business PartnerChapter 16Management Accounting: Basic FrameworkComparing Financial Accounting and Management AccountingCost of goods sold.Direct labor and manufacturing overhead costs.Direct materials costs.Steps in the Manufacturing Process:Convert raw materials into finished goods.Sell finished goods.Accounting for Manufacturing OperationsBuy raw materials.Raw materials & component parts that become an integral part of finished products.Can be traced directly and conveniently to products.Direct MaterialsIf materials cannot be traced directly to products, the materials are considered indirect and are part of manufacturing overhead.Includes the payroll cost of direct workers.Direct LaborThose employees who work directly on the goods being manufactured.Includes the payroll cost of direct workers.The cost of employees who do not work directly on the goods is considered indirect labor and is part of manufacturing overhead.Direct LaborThose employees who work directly on the goods being manufactured.All manufacturing costs other than direct materials and direct labor.Includes:Indirect materials.Indirect labor.Machinery and equipment costs.Cost of regulatory compliance.Manufacturing OverheadAll manufacturing costs other than direct materials and direct labor.Does not include selling or general and administrative expenses.Manufacturing OverheadIncludes:Indirect materials.Indirect labor.Machinery and equipment costs.Cost of regulatory compliance.The cost to produce a unit of product includes:Direct materialDirect laborManufacturing overheadManufacturing OverheadThe cost to produce a unit of product includes:Direct materialDirect laborManufacturing overheadManufacturing OverheadManufacturing overhead must be mathematically allocated to each unit of product using a predetermined overhead application rate.(This will be discussed later in this chapter.)Balance SheetCurrent assets and inventoryProduct Costs (manufacturing costs)Income StatementRevenueCOGSGross profitExpensesNet income.When goods are sold.as incurredPeriod Costs (operating expenses and income taxes.)as incurredProduct Costs Versus Period CostsRaw materials - inventory on hand and available for use.Work in process - partially completed goods.Finished goods- completed goods awaiting sale.Inventories of a Manufacturing BusinessDirect materials purchasedMaterials WarehouseFinished goodsFinished goods WarehouseGoods soldDirect materials usedFactoryDirect labor & Manufacturing overheadThe Flow of Physical GoodsDirect materials purchasedDirect materials usedCost of goods manufacturedCost of Goods Sold$$$Materials Inventory$$$$$$Finished Goods Inventory$$$$$$Work in Process Inventory$$$$$$The Flow of Manufacturing CostsDirect labor & Manufacturing overheadPure-Ice Inc. had $52,000 of inventory in direct materials inventory on January 1, 2002. During the year, Pure-Ice purchased $586,000 of additional direct materials. At December 31, 2002, $78,000 of the direct materials were still on hand.How much direct material was placed into production during 2002? The Flow of Manufacturing Costs Example?The Flow of Manufacturing Costs Example!The Flow of Manufacturing Costs ExampleIn addition to the direct materials, Pure-Ice incurred $306,000 of direct labor cost during 2002. Manufacturing overhead for 2002 was $724,000.Pure-Ice started 2002 with $132,000 in work in process. During 2002, units costing $1,480,000 were transfered to finished goods inventory.What is the ending balance in work in process at December 31, 2002?The Flow of Manufacturing Costs ExampleThe Flow of Manufacturing Costs Example!The Flow of Manufacturing Costs ExampleThe overhead application rate expresses an expected relationship between manufacturing overhead costs and some activity base related to the production process.Overhead Application RatesOverhead costs are estimated based on budgets and using mathematical estimation techniques.Overhead Application RatesThe base is the activitiy that “drives” the cost, called the cost driver.Direct labor hours and machine hours are commonly used cost drivers.Overhead Application RatesBig “T” Company produces engines for big trucks. Total overhead for 2002 is estimated to be $2,600,000. Big “T” applies overhead based on machine hours. Big “T” estimates machine hours for 2002 to be 162,500 hours.Compute Big “T’s” predetermined overhead rate for 2002.Overhead Application Rates ExampleOverhead Application Rates ExampleOverhead Application Rates ExampleSome companies use different cost drivers for different manufacturing activities, a process called ACTIVITY BASED COSTING.Overhead Application RatesA schedule of the cost of finished goods manufactured is prepared to assist managers in understanding and evaluating the overall cost of manufacturing products.Determining the Cost of Finished Goods ManufacturedThe cost of goods completed during the period is used to compute COGS for the period.The income statement is prepared using established financial accounting procedures.This is a great job, but the overhead is killing my profit margin!End of Chapter 16
Tài liệu liên quan