PPT 7 Accounting fo Manufacturing akuntans.pptx

akuntansi

1. Accounting for Small Medium Enterprise Week 7 accounting for manufacturing Maria Paramastri Hayuning Adi, S.E., M.Sc., CertDA

2. LEARNING OUTCOME LO 2 : Apply the accounting activities in merchandising, service and manufacturing SME accordance with SMEs Accounting Standard LO 3 : Explain the concept and methods relating to inventories and fraud and internal control.

3. oUTLINE Accounting for Manufacturing Manufacturing Operations Recording Purchases of Inventory Recording Sales Completing the Accounting Cycle Forms of Financial Statements

4. Definition of manufactu r ing ope r ations A manufacturing company is a company whose main activity is processing raw materials (raw materials) into finished goods and then selling the finished goods. This activity is often called the production process, for example: cake business, convection business, furniture business.

5. Category of Inventory Unlike retailers, manufacturers have three unique inventory categories: Raw materials, Work in Process, and Finished Goods. The following is the inventory section of the manufacturer's balance sheet

6. Category of Inventory Finished goods are costs assigned to finished products awaiting sale to customers. However, this company has a more significant amount of raw materials (i.e. components that will be used in production units that have not yet been started) and processes in progress. Work in process is the account that needs the most clarification. This account is for the cost of goods manufactured but not yet completed; contains the accumulated money spent on direct materials (that is, raw materials that have been put into production), direct labor, and applied factory overhead.

7. Production cost/manufacturing cost Production costs are the costs required for the production of goods. Most manufacturing companies divide production costs into three broad categories, namely: - direct materials - direct labor - factory overhead costs (manufacturing overhead).

8. Non-manufacturing cost Non-manufacturing costs are generally divided into two categories: 1. sales costs Sales costs include the costs of everything necessary to fulfill customer orders. These costs are sometimes called order-getting and order-filling. For example, advertising costs, shipping costs, travel costs for shipments, salaries for sales departments, and warehouse costs for storing finished goods. (2) administration fees.

9. Cost flow and classification in manufacturing businesses

10. Reco r ding Pu r chase of invento r y/ r aw mate r ial 1. Purchase of Raw Materials On April 1, business R had $7,000 in raw materials. During the Month, the company purchased additional raw materials worth $60,000. The purchase is recorded in the journal: Raw Materials $60,000 Accounts Payable $60,000

11. General Journal in Manufacturing Operations 2. Direct and Indirect Raw Material Expenditure During April, the raw materials required for production were $52,000. The raw materials consist of $50,000 of direct materials and $2,000 of indirect materials. The journal created for the expenditure of these materials is as follows: Work in Process 50,000 Manufacturing Overhead 2,000 Raw Materials 52,000

12. General Journal in Manufacturing Operations 3. Labor Costs In April, employee time cards included costs of $60,000 for direct labor and $15,000 for indirect labor. The following journal entry summarizes those costs: Wo rk in Process 60.000   Manufa ctu ring Overhead 15.000   Sala ries and Wages Payable   75.000

13. General Journal in Manufacturing Operations 4. Factory/ Manufacturing Overhead Costs Assume that in business R there are general manufacturing costs as follows: Utilities (heat, water and electricity $21,000 Rent factory equipment 16,000 Other factory overhead costs 3,000 Total $40,000 The following entries are to record these costs: Factory/Manufacturing Overhead 40,000 Accounts payable/Cash 40,000

14. General Journal in Manufacturing Operations Additionally, assume that during April, Business R recognized property taxes of $13,000 and prepaid building and equipment insurance of $7,000 was fully expensed. The following journal entry records the transaction: Work in process 20,000 Property tax 13,000 Prepaid Insurance 7,000

15. General Journal in Manufacturing Operations Additionally, assume that the company recognized depreciation on factory equipment of $18,000 during April. The journal is: Factory overhead 18,000 Accumulated depreciation 18,000 * Bisa facto ry overhead atau manufacturing overhead

16. General Journal in Manufacturing Operations 5.Non-production costs (Non-manufacturing cost) Assume that business R had selling and administrative expenses of $30,000 during April. Here's the journal: Salary and wages expenses 30,000 Salary and wages payable 30,000 Assume that depreciation on office equipment during April was $7,000. The journals required are: Depreciation expense 7,000 Accumulated depreciation 7,000

17. General Journal in Manufacturing Operations Assume that advertising expenses were $42,000 and selling and administrative expenses for April were $8,000. The journal is Advertising expenses 42,000 Selling and administrative expenses 8,000 Accounts payable/Cash 50,000

18. General Journal in Manufacturing Operations 6. WIP to Finish Goods Assume that order A was completed during April. The following journal entry shows the costs for order A from Work in Process to Finished Goods: Finished Goods xxx Work in process xxx

19. REFERENCES V. Wiratna Sujarweni. Akuntansi UMKM (Usaha Mikro Kecil Menengah), Chapter VIII Garrison, Nooreen, Brewer (201 5) . Manage r ial Accounting . Edisi . McG r aw Hill.

20. Thank you