Manufacturing Account Format.
S5 Manufacturing Account/LWL
Manufacturing Accounts ( A.
)
Function of a Manufacturing Acccount For those businesses which deal with manufacturing products. It is common in today’s business to act both as manufacturer ( ) and retailer ( ). e.g Crocodile, Bossini, G2000, U2. What is the advantage as being a manufacturer as well as a retailer? Division of Costs The purpose of a Manufacturing Account is to ascertain Cost of Production ( ).
B.
Cost of Production = Prime Cost + Factory Overheads + Opening Work in Progress – Closing Work in Progress C. Prime Cost ( ) Prime cost is the DIRECT expenses which can be traced back to each unit of production. It consists of: (1) Direct Materials ( ) (2) Direct Wages ( ) (3) Direct Expenses e.g. Royalty ( ) Factory Overheads ( ) Indirect expenses in the factory which helps production of goods. e.g. Indirect wages, rent and rates of the factory, depreciation of plant and machinery, factory fuel and power, etc. ) Work in Progress ( Where goods have not been completed, they cannot be sold in the year. For ease of accounts recording, the ‘whole’ of the Work-in-Progress is calculated. The treatment is the same as in Opening Stock and Closing Stock, i.e. + Opening WIP – Closing WIP
D.
E.
1
S5 Manufacturing Account/LWL
F.
Format Company Name Manufacturing, Trading and Profit and Loss Account for the year ended 31 December 200X _________________________________________________________________ $ $ $ Raw Materials: Opening Stock Purchases (Raw Materials) Add : Carriage Inwards xxx xxxx xx _____ xxxx (xx) _____ xxxx ______ xxxx (xx) ____ xxxx xxx xxx ______ XXXX xxx xxx xx xxx xxx _____ XXXX ________ XXXX WORK-IN-PROGRESS Opening Work-in-Progress (1.1.200x ) Less: Closing Work-in-Progress (31.12.200y) xxxx (xxx) _____ PRODUCTION COST OF GOODS COMPLETED c/d
2
Less: Return Outwards
Less: Closing Stock (Raw materials) Cost of Raw Materials Consumed Direct Materials Direct Expenses (Royalty) PRIME COST
Manufacturing Accounts ( A.
)
Function of a Manufacturing Acccount For those businesses which deal with manufacturing products. It is common in today’s business to act both as manufacturer ( ) and retailer ( ). e.g Crocodile, Bossini, G2000, U2. What is the advantage as being a manufacturer as well as a retailer? Division of Costs The purpose of a Manufacturing Account is to ascertain Cost of Production ( ).
B.
Cost of Production = Prime Cost + Factory Overheads + Opening Work in Progress – Closing Work in Progress C. Prime Cost ( ) Prime cost is the DIRECT expenses which can be traced back to each unit of production. It consists of: (1) Direct Materials ( ) (2) Direct Wages ( ) (3) Direct Expenses e.g. Royalty ( ) Factory Overheads ( ) Indirect expenses in the factory which helps production of goods. e.g. Indirect wages, rent and rates of the factory, depreciation of plant and machinery, factory fuel and power, etc. ) Work in Progress ( Where goods have not been completed, they cannot be sold in the year. For ease of accounts recording, the ‘whole’ of the Work-in-Progress is calculated. The treatment is the same as in Opening Stock and Closing Stock, i.e. + Opening WIP – Closing WIP
D.
E.
1
S5 Manufacturing Account/LWL
F.
Format Company Name Manufacturing, Trading and Profit and Loss Account for the year ended 31 December 200X _________________________________________________________________ $ $ $ Raw Materials: Opening Stock Purchases (Raw Materials) Add : Carriage Inwards xxx xxxx xx _____ xxxx (xx) _____ xxxx ______ xxxx (xx) ____ xxxx xxx xxx ______ XXXX xxx xxx xx xxx xxx _____ XXXX ________ XXXX WORK-IN-PROGRESS Opening Work-in-Progress (1.1.200x ) Less: Closing Work-in-Progress (31.12.200y) xxxx (xxx) _____ PRODUCTION COST OF GOODS COMPLETED c/d
2
Less: Return Outwards
Less: Closing Stock (Raw materials) Cost of Raw Materials Consumed Direct Materials Direct Expenses (Royalty) PRIME COST