WSU ACCTG 231 - Accounting for Nonmanufacturing Cost (2 pages)

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ACCTG 231 Lecture 6 Ch 2 Job Order Costing Continued Outline of Current Lecture I Accounting for Nonmanufacturing Cost II Schedule of Cost of Goods Manufactured Key Concepts III Product Cost Flows IV Underapplied and Overapplied Overhead A Closer Look V Multiple Predetermined Overhead Rates VI Job Order Costing in Service Companies Current Lecture I II III Accounting for Nonmanufacturing Cost Nonmanufacturing costs are not assigned to individual jobs rather they are expensed in the period incurred Examples o Salary expense of employees who work in a marketing selling or administrative capacity o Advertising expenses are expensed in the period incurred Schedule of Cost of Goods Manufactured Key Concepts This schedule contains three types of costs namely direct materials direct labor and manufacturing overhead It calculates the cost of raw material and direct labor used in production and the amount of manufacturing overhead applied to production It calculates the manufacturing costs associated with goods that were finished during the period Product Cost Flows Raw Materials o Beginning raw materials inventory raw materials purchased Raw materials available for use in production Ending raw materials inventory raw materials used in production o As items are removed from raw materials inventory and placed into the production process they are called direct materials Manufacturing Costs o Direct materials direct labor Mfg overhead applied total manufacturing costs Conversion costs are costs incurred to convert the direct material into a finished product These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute IV V VI Work in Process o Beginning work in process inventory total manufacturing costs Total working process for the period o All manufacturing costs added to production during the period are added to the beginning balance of work in process Costs associated with the goods