Escolar Documentos
Profissional Documentos
Cultura Documentos
WRITING EXERCISE
Why is it permissible to violate generally
accepted accounting principles when
preparing reports used strictly by company
management?
CERTIFICATE IN MANAGEMENT
ACCOUNTING (CMA)
Professional credential available to management
accountants with a bachelor's degree and 2
years of work experience in managerial
accounting. An accountant with an associates
degree may take the CMA exam by earning a
score of 50% or better on the Graduate Records
Examination (GRE).
Must complete a 2-day examination covering the
following:
1. Economics, finance, and management
2. Financial accounting and reporting
3. Management reporting,
behavioral issues
analysis,
and
MANUFACTURING COSTS
Direct Materialsmaterials and component parts that
become an integral part of the final product. These materials
can be traced directly to a finished unit of product.
Direct Laborcost of wages paid to employees who work
directly on the product.
Factory Overheadall other costs incurred in making the
product. These costs include the following:
1. General manufacturing costs that cannot be traced
directly to the product:
Utilities (heating, lighting)
Depreciation on machines
Property taxes
Insurance
2. Indirect Laborwages/salaries paid to workers who are
necessary to keep the factory running, but do not work
directly on the product:
Maintenance workers
Janitorial staff
Factory personnel department
Plant manager and supervisors
3. Indirect Materialsmaterials used in the manufacturing
process that do not end up in the final product:
Materials used to test machines
Lubrication used on machines
NOTE: Direct materials and direct labor costs may be treated
as factory overhead costs if they are insignificant.
Transparency Master 16(1)-5
MANUFACTURING COSTS
Product Costs
Direct
Materials
Prime Costs
Direct
Labor
Factory
Overhead
Conversion Costs
Direct
Labor
Factory
Overhead
Period Costs
Selling
Expenses
Administrative
Expenses
$XXX
Direct materials:
Beginning materials inventory
_ $XXX
Purchases
Cost of materials available for use
XXX
$XXX
XX
$XXX
Direct labor
XXX
Factory overhead:
Indirect labor
$XXX
XXX
XXX
XXX
XXX
$XXX
XX
_
$XXX
Income Statement
Sales
$XXX
$XXX
XXX
XXX
XXX
XXX
Gross profit
$XXX
Operating expenses:
Selling expenses
Administrative expenses
Total operating expenses
Net income
$XXX
XXX
XXX
$XXX