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Managerial Accounting Essay

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Below is an essay on "Managerial Accounting" from Anti Essays, your source for research papers, essays, and term paper examples.

Actual Product Costs are Purchases, Freight In, Merchandise- end of year
Goods available for sale only includes the items actually PURCHASED AND FREIGHT

Costs of Goods sold is Goods available MINUS merchandise at the end of the year
Sales Revenue- Product Costs = Gross Margin
Gross Margin= Sales- CGM&S
Period costs= expenses incurred except FREIGHT IN, costs of goods sold and purchases
Gross Margin-Period Costs = Net Operating Income

TO CALCULATE NET OPERAING INCOME
Finished Goods Beginning + Cost of Goods Manufactured- Finished Goods Ending= CGM&S
Sales- CGM&S= Gross Margin
Period Costs= Selling Costs + General and Administrative Costs
Gross Margin- Period Costs= Net Operating Income

Are direct materials an expense? No. It’s an expense when it is sold.
Calculate direct material cost= Beginning Inventory + Purchases of Direct Materials Now subtract the ending inventory
To calculate total manufacturing costs =Direct materials used, overhead, direct labor

3 inventory accounts
Direct or raw materials
Work in process
finished goods
3 manufacturing accounts
Direct materials used

Overhead

Costs of goods manufactured= total manufacturing costs = begging balance WIP then subtract ending balance WIP

Costs of goods manufactured and sold= cost of goods available for sale =CGM + Finished Goods beginning. You then take the CGAS – Finished goods ending inventory.
Treated as an expense

Two Step Income Statement
All the costs associated with the products sold become an expense this is then subtracted from the sales revenue= gross margin
Product costs cross from Balance Sheet asset to Income Statement expense

PERIOD COSTS- advertising, front office salaries, accountant wages
DIRECT COSTS- raw materials, assembly wages
INDIRECT COSTS (overhead)- depreciation, utilities, maintenance, machinery repairs, production supervisor salaries

FIXED COST- remains constant
VARIABLE COST- varies in...

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