capter_3_Slides_with_Blanks

capter_3_Slides_with_Blanks - 1 ACIS 2116 Chapter Three...

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Unformatted text preview: 1 ACIS 2116 Chapter Three Product Costing: Manufacturing Processes, Cost Terminology, and Cost Flows 2 Merchandising Firm vs. Manufacturing Firm Merchandisers . . . Buy finished goods. Sell finished goods. Manufacturers . . . Buy raw materials . Produce and sell finished goods. MegaLoMart 3 Balance Sheet Merchandiser Current assets Cash Receivables Prepaid Expenses merchandise Inventory Manufacturer Current Assets Cash Receivables Prepaid Expenses Inventories Raw materials Work in Process Finished goods 4 Inventory Raw Materials used to make a product : current asset for co. Work in Process partially complete products Finished Goods completed products awaiting sale 5 Service Firm Service Firm . . . Perform a service for a customer Inventory is not significant 6 Manufacturer - Traditional Similar machines grouped together.(or cells can be formed, can produce entire product in one area to eliminate move time) Inventory pushed from area to area. Inventory buffers maintained. Inventory handled & moved a lot. Difficult to switch to a different product 7 Lean Production and JIT Lean production(only produce what you need)*eliminates cost of keeping a lot of inventory, dont have to worry about safe-guarding it or moving it all over the factory, less likely to over process product* Eliminate waste Manage inventory JIT(just in time) Starts with customer order Products are pulled(not pushed) Rely on dependable, quick suppliers 8 The Product The Product Direct materials Direct labor Manufacturing overhead Manufacturing Costs (insurance or rent, secretaryanything Not directly traced to The product) materials that Are not directly traced to the product Such as thread for pants 9 Cannot be traced directly to specific units produced....
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capter_3_Slides_with_Blanks - 1 ACIS 2116 Chapter Three...

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