ALGORITHM - RAW MATERIALS WORK IN PROCESS FINISHED GOODS...

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Phillip A. Blanchard ©2007 This manipulation contains four numbers that are vital to the Financial Statements: 1. Ending Inventory of Finished Goods 2. Ending Inventory of Work in Process 3. Ending Inventory of Raw Materials 4. The Cost of Goods Sold These numbers constitute the "where to" part of the basic algorithm. That is, at the end of the period, where have all the costs “that must be accounted for” ended up? The Answer: In one of those four vital numbers AN ALGORITHM APPROACH TO COST OF GOODS MANUFACTURED AND SOLD
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Unformatted text preview: RAW MATERIALS WORK IN PROCESS FINISHED GOODS BEGINNING INVENTORY (FINISHED GOODS) BEGINNING INVENTORY (WORK IN PROCESS) BEGINNING INVENTORY RM (RAW MATERIALS) PURCHASES of RM (NET) RAW MATERIALS AVAILABLE ENDING INVENTORY RM (RAW MATERIALS) DIRECT MATERIALS ISSUED DIRECT LABOR MANUFACTURING OVERHEAD* WORK IN PROCESS COSTS TO BE ACCOUNTED FOR ENDING INVENTORY WIP (WORK IN PROCESS) COST OF GOODS MANUFACTURED FINISHED GOODS AVAILABLE ENDING INVENTORY FG (FINISHED GOODS) COST OF GOODS SOLD To Income Statement...
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