• thinkigcse.com

Manufacturing Account

It is prepared to ascertain the cost of goods manufactured during an accounting period.

This account is prepared only by a business which is manufacturing goods.

Items appearing on the debit side

Stock

It is of three types:

  • Raw materials: raw material purchased but not yet consumed.
  • Work in progress: Goods which are still semi-finished.
  • Finished goods: Completed goods but yet unsold and laying in warehouse waiting to be sold.

Raw materials consumed during the period is calculated as follows

Opening Stock of Raw material

xxxx

Add: Purchase of Raw Materials

xxxx

 

xxxx

Less: Closing Stock of Raw Materials

xxxx

 

xxxx

Carriage Inwards

All expenses incurred for bringing the raw materials to the factory e.g. custom duty, excise etc.

Factory overheads

All indirect expenses related to the operation of factory such as

  • indirect materials (not direct raw material used in manufacturing) e.g. lubricants for machinery
  • indirect labour (not direct labour) e.g. supervisor wages
  • indirect expenses such as factory insurance, rent, depreciation of machinery

Items appearing on Credit Side

Sale of Scrap

Scrap is the waste products during the process of manufacturing. Money realized by their sales (an income!)

Any Work in Progress

Any unfinished goods left with the manufacturer at the end of the accounting period.

 

How to calculate the Cost of Production?

Total Debit Side – Total Credit Side

This balance is known as the Cost of Production

It is transferred to the Trading Account.

 

Format of Manufacturing Account

manufacturing-account-format

download Manufacturing Account Format adobe_reader45x45

 

 

 

Exciting News!

IMPORTANT MESSAGE

Quizzes and worksheets on this website have been developed in Flash format. Flash is no more supported by browsers. Therefore, you might see blank pages on some instances. Install Flash player plugin for Chrome from Chrome Web Store. Click here 

Similarly, for other web browsers you will have to activate the relevant flash player plugins.

JOIN OUR ONLINE COURSES

New Youtube Channel - ThinkIGCSE

Hi Everyone, I have launched a new YouTube channel with more than a 100 videos on  Economics and Business Studies, tailored specifically for IGCSE and A Level and IBDP students.

Subscribe now and join us on this learning journey: @thinkIGCSE

WHO'S ONLINE

We have 206 guests and no members online

Save
Cookies user preferences
We use cookies to ensure you to get the best experience on our website. If you decline the use of cookies, this website may not function as expected.
Accept all
Decline all
Read more
Analytics
Tools used to analyze the data to measure the effectiveness of a website and to understand how it works.
Google Analytics
Our website uses Google Analytics to understand how you interact with our site and improve your browsing experience. These cookies collect information in an anonymous form, including the number of visitors to the site, where visitors have come from, and the pages they visited. The data helps us analyze trends and user behavior to enhance our website's functionality and content.
Accept
Decline
Marketing
Set of techniques which have for object the commercial strategy and in particular the market study.
Marketing
Our website uses Google marketing cookies to deliver personalized ads and measure the effectiveness of our advertising campaigns. These cookies track your online activity to help us show you relevant ads on Google services and partner websites.
Accept
Decline