Ch 2, part two Basic Managerial Acctg Concepts

Ch 2, part two Basic Managerial Acctg Concepts -...

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Chapter 2: Basic  Chapter 2: Basic  Management Accounting  Management Accounting  Concepts, continued Concepts, continued
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Merchandiser Merchandiser Current Assets Current Assets Cash Cash Receivables Receivables Prepaid Expenses Prepaid Expenses Merchandise Merchandise Inventory Inventory Manufacturer Current Assets Cash Receivables Prepaid Expenses Inventories Raw Materials Work in Process Finished Goods Cost Classifications on Financial  Cost Classifications on Financial  Statements – Balance Sheet Statements – Balance Sheet
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Inventory Relationships Inventory Relationships Costs of raw materials are transferred to work in  Costs of raw materials are transferred to work in  process as materials are used. process as materials are used. As units are completed, costs of completed units are  As units are completed, costs of completed units are  transferred to finished goods. transferred to finished goods. Materials Work in process Finished goods
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The Income Statement The Income Statement       Cost of goods sold for manufacturers differs only  Cost of goods sold for manufacturers differs only  slightly from cost of goods sold for merchandisers. slightly from cost of goods sold for merchandisers. Manufacturing Company Cost of goods sold: Beg. finished goods inv. 14,200 $ + Cost of goods manufactured 234,150 Goods available for sale 248,350 $ - Ending finished goods inventory (12,100) = Cost of goods sold 236,250 $ Merchandising Company Cost of goods sold: Beg. merchandise inventory 14,200 $ + Purchases 234,150 Goods available for sale 248,350 $ - Ending merchandise inventory (12,100) = Cost of goods sold 236,250 $
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Product Cost Flows Product Cost Flows
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Ch 2, part two Basic Managerial Acctg Concepts -...

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