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Project Management Accounting(BBAC501) - Essay Example
Author : oconnellcali
Finance & Accounting
Pages 5 (1255 words)
Lecturer Subject Code Project Management Accounting (BBAC501) Colonial Tap Company (CTC COLONIAL TAP COMPANY (CTC) FINANCIAL PERFORMANCE FOR THE YEAR ENDED Sales $980,000 Less Expenses: Material Purchased $300,000 Factory Wages-Production line $250,000 Production Supervisor’s Salary $35,000 Rent $80,000 Council Rates $5,000 Sales Staff $110,000 Advertising $18,000 Equipment Depreciation $25,000 Electricity $12,000 Manager’s Salary $80,000 Truck Lease $10,000 Total Expense $925,000 Net Profit $55,000 Comment on cost classification According to the financial statement pres…
To put this into lump light it would be good to know what constitute a cost in manufacturing process. Manufacturing Overhead Costs Stocks are normally classified as an asset in the financial statements, and it is very pertinent note that each product mentioned as en inventory includes the costs of the following: 1. Direct material 2. Direct labor 3. Manufacturing (or factory) overhead Direct material and labour costs are directly traceable to the product being produced. Manufacturing (or factory) overhead on the other hand consist of costs which indirectly relate to factory and on this regard they are divided and allocated to each unit of product. Accordingly this cost are reported in balance sheet inform of finished goods and work in progress (WIP) (GAAP). There are also other costs that would be treated as manufacturing overhead depending on the circumstances for instance, a loyalty or property tax imposed on a factory building. ...