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Textile Costing · Lecture 06
Unit Costing
Variable and fixed cost, total and unit cost, work in process, and the cost of goods sold for a manufacturer.
Cost driverVariable vs fixedCost of goods manufactured
Definitions
- Cost driver
- Any factor that affects total cost — a change in the level of the driver changes the total cost of the related cost object: units produced, machine set-ups, advertisements.
- Variable cost
- Changes in total in proportion to changes in a cost driver.
- Fixed cost
- Does not change in total despite changes in the cost driver.
- Unit cost
- Some total cost divided by some number of units — always ask which total and which units.
- Work-in-process inventory
- Goods partially worked on but not yet completed.
- Finished goods inventory
- Goods fully completed but not yet sold.
Merchandising
Beginning merchandise inventory
+ Purchases
− Ending merchandise inventory
= Cost of goods sold
+ Purchases
− Ending merchandise inventory
= Cost of goods sold
Manufacturing
Beginning finished goods
+ Cost of goods manufactured
− Ending finished goods
= Cost of goods sold
+ Cost of goods manufactured
− Ending finished goods
= Cost of goods sold
Cost of goods manufactured and sold
The manufacturing statement flows from materials to work in process to finished goods. Edit any input; the totals chain through to the cost of goods sold.
| A | B | C | |||
|---|---|---|---|---|---|
| 1 | Direct materials | ||||
| 2 | Beginning inventory | ||||
| 3 | Purchases of direct materials | ||||
| 4 | Cost of direct materials available for use | 84,000 | |||
| 5 | Ending inventory | ||||
| 6 | Direct materials used | 76,000 | |||
| 7 | Direct manufacturing labour | ||||
| 8 | Indirect manufacturing cost | ||||
| 9 | Indirect manufacturing labour | ||||
| 10 | Supplies | ||||
| 11 | Utilities | ||||
| 12 | Depreciation — plant building | ||||
| 13 | Depreciation — plant equipment | ||||
| 14 | Miscellaneous | 11,250 | |||
| 15 | Manufacturing costs incurred during the period | 105,000 | |||
| 16 | Add beginning work in process | ||||
| 17 | Total manufacturing costs to account for | 111,000 | |||
| 18 | Subtract ending work in process | ||||
| 19 | Cost of goods manufactured | 104,000 | |||
| 20 | Cost of goods sold | ||||
| 21 | Beginning finished goods inventory | ||||
| 22 | Cost of goods manufactured | 104,000 | |||
| 23 | Cost of goods available for sale | 126,000 | |||
| 24 | Ending finished goods inventory | ||||
| 25 | Cost of goods sold | 108,000 | |||
blue = input (edit me)grey = formula (click to see it)