My Lab Review and Learnings

Status Not started

Due @January 22, 2024

Complete? Done

Courses 💰 Cost Accounting

Type Class Review

Period costs:

are all costs in income statement aside from costs of goods sold

are treated as expenses at the time they are incurred because they are presumed
not to benefit future periods (or because there is not sufficient evidence to conclude
that such benefit exists). Expensing these costs immediately best matches
expenses to revenues.

Inventoriable Costs:

are all costs of a product that are regarded as an asset when they are incurred and
then become cost of goods sold when the product is sold.

for a manufacturing company are included in work-in-process and finished goods

inventory (they are "inventoried") to build up the costs of creating these assets.

QUESTION EXPLANATIONS
To calculate this, we work in order, using
data provided from the tables.

Direct Materials Available for Production

= direct materials inventory + direct
materials purchased

THEN

My Lab Review and Learnings 1

 Direct Materials Inventory EOP = Direct
materials available for production - direct
materials used

Total manufacturing overhead costs =

fixed overhead costs + variable overhead
costs

To answer this question we need to

rearrange the formula for total
manufacturing costs incurred to solve for
the amount needed. Calculate the direct
manufacturing labor costs for the month
of March.

Total Manufacturing Costs = Direct

Materials+Direct Labor+Manufacturing
Overhead
REARRANGED IS…

Total manufacturing costs incurred -

manufacturing overhead -direct materials
used = direct labour

My Lab Review and Learnings 2

 The ending balance for work-in-process
inventory is calculated by adding in the
manufacturing costs that were incurred
during the period and subtracting out the
cost of the goods that were
manufactured (and transferred to
finished goods). Calculate the work-in-
process inventory value at MarchMarch

WIP available for production = WIP BOP

+ manufacturing costs incurred

WIP BOP = WIP available for production -

cost of goods manufactures

Calculate the value of the goods that are

completed and available to be sold. You
will add in the cost of the goods
manufactured, the value that was
transferred out of work-in-process and
transferred into finished goods. Now
calculate the cost of goods available for
sale.

Finished goods available for sale=

finished goods inventory + cost of goods
manufactured

My Lab Review and Learnings 3

 Finished goods inventory = finished
goods available for sale - cost of goods
sold

HOW TO WRITE A SCHEDULE OF COST OF GOODS MANUFACTURED

THIS IS DONE IN THREE STEPS

1. DIRECT MATS

2. INDIRECT MANUFACTURING COSTS

3. CALC COGM = DIRECT MATS+ DIRECT MANUFACTURING COSTS + INDIRECT

MANUFACTURING COSTS

My Lab Review and Learnings 4

 HOW TO WRITE SCHEDULE OF COST OF GOODS PURCHASED

My Lab Review and Learnings 5

 HOW TO WRITE SCHEDULE OF COST OF GOODS SOLD

Cost of goods purchased can only be found from the SCHEDULE OF COST OF
GOODS PURCHASED

HOW TO WRITE INCOME STATEMENT

Gross Margin = Revenue - COGS

My Lab Review and Learnings 6

My Lab Review and Learnings 7