Accounting

FNSACCT507B

Provide Management

Accounting Information

The Cost Accounting Cycle

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Learning Outcome

 The Production Progress

 Flow of Cost in Product Manufacturing

 Journal and ledger system:

 Input cost accounts

 Progressing cost accounts

 Output cost accounts

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The Production Progress

The Production Progress involves converting

input into output:

INPUT

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OUTPUT

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Flow of Cost in Product Manufacturing

Materials



Indirect

Direct

Overhead



Work In

Process

Indirect

Direct

Finished

Goods

Cost Of

Good

Sold

Labour

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The Cost Accounting Cycle

Bryan Company produces

a plywood countertop

backing. Bryan had no

beginning inventories of

work in process.

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The Cost Accounting Cycle

Purchase of materials: Bryan bought 1,400,000 feet

of wood at $0.095 per foot.

1. Materials Inventory

Cash or Accounts Payable

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$133,000

$133,000

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The Cost Accounting Cycle

Bryan used 1,300,000 feet of wood.

2. Work in Process

Materials Inventory

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$123,500

$123,500

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The Cost Accounting Cycle

Direct laborers earned $344,400 for 41,000 hours of

work at $8.40 per hour.

3a. Direct Labor

Cash or Accrued Payroll

3b. Work in Process Inventory

Direct Labor

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$344,400

$344,400

$344,400

$344,400

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The Cost Accounting Cycle

Bryan incurred various overhead costs.

4. Variable Manufacturing Overhead $251,300

Fixed Manufacturing Overhead

461,000

Various, Cash, Accrued

Expenses, Accumulated

Depreciation

$712,300

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The Cost Accounting Cycle

Bryan finished 40,000 square yards of plywood.

Another 3,000 square yards were still in process at

the end of 20X5.

5. Work in Process Inventory

Variable Mfg. Overhead

Work in Process...