Cost Accounting Cycle2
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Transcript of Cost Accounting Cycle2
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8/8/2019 Cost Accounting Cycle2
1/21
ISLAMABAD COMMERCE COLLEGE FOR WOMENF-10/3, ISLAMABAD
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8/8/2019 Cost Accounting Cycle2
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LIST OF ITEMSNOT included in HEAD Office Books
y Material Control
yW-i-p Controly FOH Control
y Finished goods control
y FOH Applied
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LIST OF ITEMSNOT included in Factory Office books
y Voucher payable
y Payroll controlyAccrued payroll
y Marketing overhead
yAdministrative overhead
y Cost of goods sold
y Prepaid insurance
yAllowance for depreciation
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GENERAL JOURNAL HEAD OFFICE BOOKS FACTORYOFFICEBOOKS
PURCHASING MATERIAL/stores/shipping supplies TO SUPPLIER/VENDOR:
Material controlVoucher payable
Factory LedgerVoucher payable
Material controlGeneral Ledger
RETURNING MATERIAL /stores/shipping supplies TO SUPPLIER/VENDOR:
Voucher PayableMaterial Control
Voucher payableFactory Ledger
General LedgerMaterial control
ISSUANCE OF MATERIAL TO FACTORY FROM THE STORE ROOM:
W-i-p controlF.O.H controlSelling overhead control
Material control
Selling overhead controlFactory Ledger
W-i-p controlF.O.H controlGeneral Ledger
Material control
RETURN OF UNUSED MATERIAL FROM THE FACTORY TO STORE ROOM:
Material controlw-i-p controlfoh controlSelling overhead con
Factory LedgerSelling overhead cont
Material controlGeneral LedgerW-i-p control
F.O.H control
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GENERAL JOURNAL HEAD OFFICE BOOKS FACTORYOFFICEBOOKS
RETURN OF UNUSED SHIPPING SUPPLIES FROM FACTORY
Material controlSelling overhead con
Factory LedgerSelling overhead cont
Material controlGeneral Ledger
RETURN OF UNUSED DIRECT MATERIAL FROM FACTORY
Material controlw-i-p control
Material controlW-i-p control
RETURN OF UNUSED INDIRECT MATERIAL FROM FACTORY
Material controlF.O.H control
Material controlF.O.H control
REQUISITION OF DIRECT MATERIAL TO FACTORY
W-i-p controlMaterial control
W-i-p controlMaterial control
REQUISITION OF INDIRECT MATERIAL TO FACTORY
F.O.H controlMaterial control
F.O.H controlMaterial control
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GENERAL JOURNAL HEAD OFFICE BOOKS FACTORYOFFICEBOOKS
REQUISITION OF SHIPPING SUPPLIES TO FACTORY:
Selling overhead controlMaterial control
Selling overhead controlFactory Ledger
General LedgerMaterial control
PAYROLL ANALYSIS/DISTRIBUTION OF PAYROLL/REDORDING GROSSPAYROLL:
W-i-p control
Foh controlSelling overhead controlAdministrative overhead
Payroll control
Factory ledger
Selling overhead controlAdministrative overhead
Payroll control
W-i-p control
F.O.H controlGeneral ledger
DEDUCTIONS BY EMPLOYEE /NET PAYROLL:
Payroll controlincome tax with heldProvident fund payable
Accrued payroll
Payroll controlincome tax with heldProvident fund payable
Accrued payroll
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GENERAL JOURNAL HEAD OFFICE BOOKS FACTORYOFFICEBOOKS
PREPARINGVOUCHER:
Accrued payrollVoucher payable
Accrued payrollVoucher payable
VOUCHER PAID:
Voucher payablecash
Voucher payablecash
EMPLOYERS CONTRIBUTION OF PROVIDENT FUND:
F.O.H controlSelling overhead controlAdministrative overhead
prov.fund payable
Factory ledgerSelling overhead controlAdministrative overhead
prov.fund payable
F.O.H controlGeneral ledger
ACTUAL FOH COST RECORDED
F.O.H controlAllowance for deprePrepaid insuranceVouchers payable
Factory ledgerAllowance for deprePrepaid insuranceVouchers payable
F.O.H controlgeneral ledger
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GENERAL JOURNAL HEAD OFFICE BOOKS FACTORYOFFICEBOOKS
SELLING OVERHEAD COSTS RECORDED:
Selling overhead controlAllowance for deprePrepaid insuranceVouchers payable
Selling overhead controlAllowance for deprePrepaid insuranceVouchers payable
ADMINISTRATION COSTS RECORDED:
Admini overhead controlAllowance for deprePrepaid insuranceVouchers payable
Admini overhead controlAllowance for deprePrepaid insuranceVouchers payable
RECORDING DEPRECIATION FOR THE THREE DEPARTMENTS:
F.O.H controlSelling overhead controlAdmini overhead control
Allowance for depre
Factory ledgerSelling overhead controlAdmini overhead control
Allowance for depre
F.O.H controlGeneral ledger
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GENERAL JOURNAL HEAD OFFICE BOOKS FACTORYOFFICEBOOKS
RECORDING INSURANCE FOR THE THREE DEPARTMENTS:
F.O.H controlSelling overhead controlAdmini overhead control
Prepaid insurance
F actory ledgerSelling overhead controlAdmini overhead control
Prepaid insurance
F.O.H controlGeneral ledger
RECORDING OTHER COSTS FOR THE THREE DEPARTMENTS:F.O.H controlSelling overhead controlAdmini overhead control
vouchers payable
Factory ledgerSelling overhead controlAdmini overhead control
vouchers payable
F.O.H controlGeneral ledger
COMPLETION OF FINISHED GOODS/COST OF GOODS COMPLETED:
Finished goods controlW-i-p control
Finished goods controlW-i-p control
SALES OF COMPLETED GOODS/COST OF GOODS SOLD:
Cost of goods soldFinished goods control
Cost of goods soldFactory ledger
General ledgerFinished goods control
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PAYROLL IS MAINTAINED AT HEAD OFFICEHEAD OFFICE FACTORY OFFICE
PAYROLL ANALYSIS/DISTRIBUTION OF PAYROLL/REDORDING GROSS
PAYROLL:
Factory ledgerSelling overhead controlAdministrative overhead
Payroll control
W-i-p controlF.O.H control
General ledger
DEDUCTIONS BY EMPLOYEE /NET PAYROLL:Payroll control
income tax with heldProvident fund payable
Accrued payroll
PREPARINGVOUCHER:
Accrued payrollVoucher payable
VOUCHER PAID:
Voucher payablecash
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PAYROLL CONTROL IS NOT USED AT ALL/PAYROLL
CLEARING ACCOUNT IS NOT USEDHEAD OFFICE FACTORY OFFICE
PAYROLL ANALYSIS/DISTRIBUTION OF PAYROLL/REDORDING GROSSPAYROLL AND DEDUCTIONS BY EMPLOYEE /NET PAYROLL:
Factory ledgerSelling overhead controlAdministrative overhead
Payroll controlPayroll controlincome tax with heldProvident fund payable
Accrued payroll
W-i-p controlF.O.H control
General ledger
PREPARINGVOUCHER:
Accrued payrollVoucher payable
VOUCHER PAID:
Voucher payable
cash
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PAYROLL CONTROL IS NOT USED AT ALL/PAYROLL
CLEARING ACCOUNT IS NOT USEDHEAD OFFICE FACTORY OFFICE
EMPLOYERS CONTRIBUTION OF PROVIDENT FUND:
Factory ledgerSelling overhead controlAdministrative overhead
prov.fund payable
F.O.H controlGeneral ledger
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FACTORY MAINTAINS ITS OWN PAYROLLHEAD OFFICE FACTORY OFFICE
PAYROLL ANALYSIS/DISTRIBUTION OF PAYROLL/REDORDING GROSS
PAYROLL :
Selling overhead controlAdmini overhead control
Payroll control
W-i-p controlF.O.H control
Factory payroll
DEDUCTIONS BY EMPLOYEE /NET PAYROLL:
Factory ledgerPayroll control
Income tax with heldProv.fund payable
Accrued payroll
Factory payrollGeneral ledger
PREPARINGVOUCHER:
Accrued payrollVoucher payable
VOUCHER PAID:
Voucher payable
cash
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8/8/2019 Cost Accounting Cycle2
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FACTORY MAINTAINS ITS OWN PAYROLL
HEAD OFFICE FACTORY OFFICE
EMPLOYERS CONTRIBUTION OF PROVIDENT FUND:
Factory ledgerSelling overhead controlAdministrative overhead
prov.fund payable
F.O.H controlGeneral ledger
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DEFECTIVE PRODUCTION
y Units which require additional work.
y Defects that can be removed by putting more effortand additional cost.
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How to treat the defective and
spoiled production?y Defective units are caused by normal human or
machine fault. It is wise to spread the cost of rework to
all units/entire production which are goods units.y Spoilage is normal manufacturing condition then the
cost should be absorbed by all good units.
y Sometimes defective and spoiled units are charged to a
particular job because of strict specifications by acustomer which are not observed in usual productionof the company.
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Defective productionCost of rework charged to job Cost of rework charged to factory
overhead
Recording initial work or productionW-i-p materialW-i-p laborW-i-p foh
Mat contrPayroll contr
Foh applied
W-i-p materialW-i-p laborW-i-p foh
Mat contrPayroll contr
Foh appliedRecording additional work /rework
W-i-p materialW-i-p laborW-i-p foh
Mat contrPayroll contrFoh applied
Foh contrMat contrPayroll contrFoh applied
Completion of order
Finished goods controlW-i-p control
Finished goods controlW-i-p control
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SPOILED PRODUCTIONy Spoiled units are always sold as seconds below cost.
y These are those faulty units of output which can not be
reworked to bring them up to standard qualityspecifications.
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Spoiled productionCost of rework charged to job Cost of rework charged to factory
overhead/entire production
Recording initial work or production
W-i-p materialW-i-p laborW-i-p foh
Mat contr
Payroll contrFoh applied
W-i-p materialW-i-p laborW-i-p foh
Mat contr
Payroll contrFoh applied
Recording spoiled goods
Spolied goodsW-i-p materialW-i-p labor
W-i-p foh
Spoiled goodsFoh contr
W-i-p material
W-i-p laborW-i-p foh
Completion of order
Finished goods controlW-i-p control
Finished goods controlW-i-p control
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Thank you for today