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  • Basic Cost Act

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    Regis, Julia Elyssa B.
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    This document discusses 3 types of inventory accounts: materials inventory, work in process inventory, and finished goods inventory. Materials inventory tracks raw materials that are unused or used to produce work in process inventory. As materials are used and factory overhead is added, the costs are transferred to work in process inventory, which then becomes finished goods inventory once production is complete. Finished goods are then either kept in inventory or sold, with the costs of goods sold flowing to the income statement.

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    basic cost act

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    This document discusses 3 types of inventory accounts: materials inventory, work in process inventory, and finished goods inventory. Materials inventory tracks raw materials that are unused or used to produce work in process inventory. As materials are used and factory overhead is added, the costs are transferred to work in process inventory, which then becomes finished goods inventory once production is complete. Finished goods are then either kept in inventory or sold, with the costs of goods sold flowing to the income statement.

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    © All Rights Reserved
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    3 views2 pages

    Basic Cost Act

    Uploaded by

    Regis, Julia Elyssa B.
    This document discusses 3 types of inventory accounts: materials inventory, work in process inventory, and finished goods inventory. Materials inventory tracks raw materials that are unused or used to produce work in process inventory. As materials are used and factory overhead is added, the costs are transferred to work in process inventory, which then becomes finished goods inventory once production is complete. Finished goods are then either kept in inventory or sold, with the costs of goods sold flowing to the income statement.

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    © All Rights Reserved
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    of 2

    3 INVENTORY ACCOUNTS

    1.MATERIALS INVENTORY
    2.WORK IN PROCESS INVENTORY
    3.FINISH GOODS INVENTORY

    Materials UNUSED ENDING MATERIALS INVENTORY


    Materials USED
    +used service labors
    WORK IN
    +used FACTORY OVERHEAD
    PROCESS
    -Indirect Materials
    INVENTORY
    -Indirect Labors
    -Utility Costs
    -Depreciation of Factory Machineries
    -Depreciation of Factory Building &Supplies
    ENDING
    Costs remaining in WIP= partly completed units WORK IN
    PROCESS
    INVENTORY

    FINISH
    BATCH/ORDER/UNITS /GOODS/COMPLETED GOODS
    INVENTORY
    ITEMS UNSOLD ENDING FINISH GOODS INVENTORY
    UNITS SOLD COST OF GOODS SOLD ACCOUNTS (INCOME
    STATEMENT)

    3 TYPES OF COSTS
    1. DM
    2. DL ACCUMULATE WIPIA -accounting period
    3. FOH

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