AC222Chapter2 - AC222 KEY TERMS AND NOTES CHAPTER 2 Product...

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AC222 KEY TERMS AND NOTES CHAPTER 2 Product costs = Manufacturing costs = Inventoriable costs Period costs = Non-manufacturing costs = Non-inventoriable costs Direct materials Marketing and selling Direct labor Conversion costs Administrative Overhead COST OF GOODS MANUFACTURED: Beginning raw materials + Purchases = Materials available for use - Ending raw materials (still in inventory) = Raw materials used for production (what we used to make things) + (the people who make these things) + Manufacturing overhead (what are some of the costs in here 1 ?) = Total MANUFACTURING COSTS + Beginning work in process (items that were started last period) - Ending work in process (partially made goods still being worked on) = COST OF GOODS MANUFACTURED COST OF GOODS SOLD: Beginning finished goods + Cost of goods manufactured - Ending finished goods = Cost of goods sold Balance Sheet Income Statement 1 Try keeping a list of all the items you come across in the reading, problems, class, etc. that are “manufacturing overhead.” This will help you make more sense of the future chapters where we talk about how to associate these “indirect” costs with the products and services being produced. AC222 1 pd rev 8/10/11
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Raw materials inventory Work in Process inventory Cost of goods sold Finished Goods inventory AC222 2 pd rev 8/10/11
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Product cost flow Another way of looking at the manufacturing statement on the previous page Raw materials inventory Work in Process Inventory Beginning balance Beginning balance $1,000 $2,000 Used Direct materials Purchases $9,000 $9,000 Completed $10,000 Direct labor $34,000 Ending balance $2,000 sold $8,000 Cost of goods $40,000 Manufactured $34,000 Ending balance $2,000 AC222 3 pd rev 8/10/11
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This chapter is all about VOCABULARY.
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AC222Chapter2 - AC222 KEY TERMS AND NOTES CHAPTER 2 Product...

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