Examples of factory overhead costs include: indirect materials, indirect labor, depreciation of the factory

equipment and plant, amortization of patents, the cost of small tools used, factory utilities, insurance on
the factory and equipment, property taxes on plant and equipment, property taxes on materials and
goods
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Direct Materials used= Raw materials beginning + Raw materials purchased - Ending raw materials

Total manufacturing cost = Direct materials + Direct labour + Manufacturing overheads

Total cost of goods placed in process = TMC + Work in process, beg.

Cost of goods manufactured = Total manufacturing cost + Work in process, beg. - Work in process end.

Goods available for sale = COGM + Finished Goods inventory, Beg

Cost of Goods sold = Goods avaialable for sale - Finished goods inventory, end
The calculation of the cost of goods sold for a manufacturing company is:
a. Beginning Inventory of Finished Goods.
b. Add: Cost of Goods Manufactured.
c. Equals: Finished Goods Available for Sale.
d. Subtract: Ending Inventory of Finished Goods.
e. Equals: Cost of Goods Sold.

Net sales = Sales - (Sales R&A + Sales Discount)

Gross Profit = Net sales - COGS

Net income = Gross profit - Other expenses

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Raw materials and WIP is closed.

Temporary accounts/expenses are closed (that are directly used)