tailieunhanh - Lecture Introduction to Accounting: An integrated approach: Chapter 9 - Penne Ainsworth, Dan Deines

Chapter 9 - Recording and evaluating conversion process activities. In this chapter, the learning objectives are: Explain the different types of manufacturing costs and how manufacturing costs are different than nonmanufacturing costs, describe manufacturing cost flows for direct materials and direct labor and record these activities, explain the process of applying manufacturing overhead and record these activities. | Chapter 9 Recording and Evaluating Conversion Process Activities Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 9- What are the Primary Activities in the Conversion Process? Schedule production Obtain raw materials (internal transfer) Use labor and manufacturing resources to convert raw materials into finished goods Store finished goods until sold (internal transfer) 9- Which of the Conversion Process Activities are Accounting Events? Obtain raw materials Increase work-in-process inventory Decrease direct materials inventory Use labor and overhead Increase work-in-process inventory Store finished goods Increase finished goods inventory Decrease work-in-process inventory 9- What is the Basic Flow of Information in the Conversion Process? Customer places an order and production is scheduled Raw materials are requisitioned and recorded Labor is used and recorded Cost record prepared and goods are manufactured Goods are finished and recorded 9- What are the Manufacturing Inventory Accounts? Direct materials inventory Current asset (similar to Merchandise Inventory for a merchandising company): Cost of direct materials on hand Increases when purchases of direct materials are made (Chapter 8) Decreases when direct materials are requisitioned into production 9- Inventories Continued Work-in-process inventory Current asset: Cost of products that have been started but not completed Increases when direct materials are requisitioned into production Increases when direct labor is used in production Increases when manufacturing overhead is applied to production Decreases when products are finished 9- Inventories Continued Finished goods inventory Current asset: Cost of products that have been finished but not sold Increases when products are finished Decreases when products are sold (Chapter 10) 9- How do Costs Flow through the Inventory Accounts? Beginning direct materials inventory + Purchases of direct . | Chapter 9 Recording and Evaluating Conversion Process Activities Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 9- What are the Primary Activities in the Conversion Process? Schedule production Obtain raw materials (internal transfer) Use labor and manufacturing resources to convert raw materials into finished goods Store finished goods until sold (internal transfer) 9- Which of the Conversion Process Activities are Accounting Events? Obtain raw materials Increase work-in-process inventory Decrease direct materials inventory Use labor and overhead Increase work-in-process inventory Store finished goods Increase finished goods inventory Decrease work-in-process inventory 9- What is the Basic Flow of Information in the Conversion Process? Customer places an order and production is scheduled Raw materials are requisitioned and recorded Labor is used and recorded Cost record prepared and goods are manufactured Goods are finished and