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    Managerial accounting involves classifying costs as either product costs, which are inventoriable assets, or period costs, which affect the income statement. Product costs include direct materials, direct labor, and manufacturing overhead. These costs are treated differently depending on whether they are actual, normal, or standard costs. Costs also behave variably, fixedly, or as mixed costs depending on how their total and per unit amounts change with production volume. Cost accounting systems include job order costing for batch production and process costing for continuous production. Standard journal entries are made to track raw materials, labor, overhead, work in process, finished goods, cost of goods sold, and overhead under/over-applied amounts.

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    MAS-DAY-1

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    Managerial accounting involves classifying costs as either product costs, which are inventoriable assets, or period costs, which affect the income statement. Product costs include direct materials, direct labor, and manufacturing overhead. These costs are treated differently depending on whether they are actual, normal, or standard costs. Costs also behave variably, fixedly, or as mixed costs depending on how their total and per unit amounts change with production volume. Cost accounting systems include job order costing for batch production and process costing for continuous production. Standard journal entries are made to track raw materials, labor, overhead, work in process, finished goods, cost of goods sold, and overhead under/over-applied amounts.

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    8 views3 pages

    Mas Day 1

    Uploaded by

    nodnel salon
    Managerial accounting involves classifying costs as either product costs, which are inventoriable assets, or period costs, which affect the income statement. Product costs include direct materials, direct labor, and manufacturing overhead. These costs are treated differently depending on whether they are actual, normal, or standard costs. Costs also behave variably, fixedly, or as mixed costs depending on how their total and per unit amounts change with production volume. Cost accounting systems include job order costing for batch production and process costing for continuous production. Standard journal entries are made to track raw materials, labor, overhead, work in process, finished goods, cost of goods sold, and overhead under/over-applied amounts.

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    of 3

    MANAGERIAL ACCOUNTING

    *Cost- the sacrifice made to achieve a particular purpose

    1. product cost – inventoriable, balance sheet, asset


    2. period cost- income statement, cogs, selling and administrative expense

    MANUFACTURING COST (PRODUCT COST)

    *they are classified because these 3 cost have different treatment

    1. DIRECT MATERIAL – raw materials that are traceable(physical) and material(value) in finished
    products
    2. DIRECT LABOR – salaries, wages & fringe benefits
    3. MANUFACTURING OVERHEAD
    a. Indirect material
    b. Indirect labor
    c. Other manufacturing cost

    ACTUAL (end of the NORMAL STANDARD (beginning


    period) of the period)
    DM ACTUAL ACTUAL STANDARD
    DL ACTUAL ACTUAL STANDARD
    MOH ACTUAL STANDARD STANDARD
    (BUDGETED/PREDETERMINED
    )

    COST BY BEHAVIOR

    1. VARIALE COST

    Per unit: constant


    total: directly proportional

    2. FIXED COST
    Per unit: varies
    total: fixed

    3. MIXED COST (half varies and half fixed)

    SUNK COST
    -not relevant/ past forgotten
    OPPORTUNITY COST
    -relevant, lost benefit

    COST ACCOUNTING SYSTEM

    1. JOB-ORDER COSTING – batch production, unidentical products


    2. PROCESS COSTING – identical product

    MANUFACTURING COST

    PROCUREMENT PRODUCTION WAREHOUSING SELLING


    Raw materials
    Labor WIP FG COGS
    overhead

    *cost pool- account used for the accumulation of cost

    PROFORMA JOURNAL ENTRY

    A. PURCHASE OF RAW MATERIALS


    Raw Materials
    Cash or A/P
    B. INCURRENCE OF FACTORY SALARIES & WAGES
    Factory Payroll
    Factory payroll payable
    C. INCURRENCE OF OVERHEAD
    *depreciation
    Manufacturing overhead control
    Accumulated Depreciation
    *utilities
    manufacturing overhead control
    Utilities payable/cash
    *factory insurance
    manufacturing overhead control
    Prepaid Insurance
    D. REQUISITIONING OF MANUDACTURING
    Work in process
    RM Inventory
    Factory payroll
    Applied manufacturing OH
    E. UPON COMPLETION
    Finished Goods
    WIP
    F. UPON SALE OF FG
    COGS
    A/R or cash
    FG INVENTORY
    sale

    G. CLOSURE OF MANUFACURING OVERHEAD CONTROL


    Actual OH>Applied OH= Underapplied
    Under/over rapplied mfgt OH
    Applied mfgt OH
    MOH Control

    ActualOH<Applied OH= Overapplied


    Applied mfgt OH
    MOH Control
    Over/under-applied oh

    H. CLOSURE OF THE OVER/UNDER APPLIED OH TO COGS


    *UNDERAPPLIED
    COGS
    Over/under-applied oh
    *OVERAPPLIED
    Over/under-applied oh
    COGS

    Predetermined OH Rate= budgeted oh/budgeted activity cost driver

    COST DRIVER (volume-based costing/ traditional costing)


    1. Direct labor hours
    2. Direct labor cost
    3. Machine hours

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