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Reporting & Accounting

for Manufacturing

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Characteristics of operation

Warehouse

Sales Division

 Administrative Division

Cost of Goods Sold 

Income Statement

Sales 

Sales Expenses 

Administrative Expenses 

Purchasing

Plant

Raw Material

Warehouse

Finish Goods 

Cost of Production Statemen

Manufacturing

Cost 

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Functional Cost

Classification

Direct Labor 

Production

Total

Operation

Commercial

Overhead

Raw Material

+

=

+

+

=

Sales

Indirect

Labor OverheadIndirect

Material

+ +

+

=

= Administrative

Conversion

Primary

Period (non-manufacturing

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Components of Production Cost 

Overhead

Raw Material Direct Labor 

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Sales

Cost of Goods Sold:

Finish Goods, January 1

Cost of Manufacture (appendix A) 

 Available for saleFinish Goods, December 31

Gross Profit

Expenses:

Operating

Operating IncomeNon-operating

Earning Before Income Tax

Rp 7.800.000

27.714.000 

Rp35.514.0005.300.000

Rp45.200.000

30.214.000

Rp14.986.000

3.186.000

Rp11.800.0001.800.000

Rp10.000.000

Ceramic Manufacture

Income Statement for December 31, 2001 

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Work In Process January 1

Raw Material used:

Raw Material January 1

Raw Material Purchased 

RM available for processRaw Material December 31

Direct Labor 

Factory Overhead :

Production manager salary

Depreciation of plant building

Depreciation of machine

Indirect material

ElectricityPlant insurance

Other expenses

Cost of Production

Work In Process, December 31

Cost of Manufacture

Rp 4.200.000

13.400.000 

Rp17.600.0003.800.000

Rp 2.140.000

850.000

1.500.000

840.000

357.000152.000

235.000

Rp 2.450.000

13.800.000

7.490.000

6.074.000

Rp29.814.000

2.100.000

Rp27.714.000 

Ceramic Manufacture

 Appendix A: Cost of ProductionFor December 31, 2001 

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Closing Entries 

(a)  Work In Process ................................ 

RM inventory …………………………….. 

RM purchased …………………………… 

(b) RM Inventory …………………………………... 

Work In Process ………………………….. 

(c) Work In Process ………………………………. Direct Labor …………………………….. 

(d) Factory Overhead ……………………………… 

Salary ……………….............................. 

Depreciation of plant building ………….. 

Depreciation of machine ………………. 

Indirect material ………………………… Electricity ……………………………….. 

Plant Insurance …………………………. 

Other Expenses ………………………... 

17.600.000

3.800.000

7.490.000

6.074.000

4.200.000

13.400.000

3.800.000

7.490.000

2.140.000

850.000

1.500.000

840.000357.000

152.000

235.000

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Notes: This amount that moved from Work In Process to Finish Goods is

Cost of Manufacture of that period. 

(e)  Work In Process ………………………………… 

Factory Overhead ……………………….. 

(f) Finish Good Inventory …………………………. 

Work In Process ………………………… 

6.074.000

27.714.000

6.074.000

27.714.000

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The Flow of Manufacturing Cost 

Work In Process 

2.450 

4.200 

13.400 

7.490 

6.074 

3.800 

27.714 

Finish Goods Inv. 

7.800 27.714 

30.214

Factory Overhead 

2.140850

1.500

840

357

152235 

6.074 

RM Inventory 

4.200 3.800 

4.200 

RM Purchased 

13.400  1.3400 

Direct Labor  

7.490  7.490 

Cost of Goods Sold 

30.214 

From :transactions,

adjustments,

& allocation

Cost of Manufacturing Bal. Rp2.100 

Bal. Rp5.300 

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Work In Process Analysis 

Work In Process 

2.450

4.200 

13.400

7.490

6.074 

3.800

27.714 

Bal. Rp2.100

Beg Bal

Raw Material Used

Ending Bal

Direct Labor 

Factory Overhead

Cost of Manufacture

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Revenue $xxxCosts and expenses:

Costs of sales xxx

Selling and administrative xxx

Interest expense xxx

Other income/expense, net xxx

Restructuring charge xxx

Total costs and expenses xxxIncome before income taxes xx

Income taxes xx

 Net income $ xx

Single-Step

Income

Statement

Form of the I ncome Statement  

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Revenue $xxxCosts of goods sold:

Beginning inventory xxx

 Net purchases xxx

Cost of goods available for sale xxx

Less ending inventory xxx xxx

Gross profit on sales xxx

Operating expenses:Selling expenses xxx

General expenses xxx xxx

Other income xxx

Multiple-Step

Income

Statement

Form of the I ncome Statement  

Continued

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