Chapter 26 - Accounting for manufacturing activities. After reading this chapter, you should be able to: Prepare a statement of cost of goods manufactured, explain the basic components of manufacturing cost, prepare an income statement for a manufacturing business, prepare a balance sheet for a manufacturing business, prepare a worksheet for a manufacturing business,. | 1- McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Accounting for Manufacturing Activities Section 1: Accounting for Manufacturing Activities Chapter 26 Section Objectives Prepare a statement of cost of goods manufactured. Explain the basic components of manufacturing cost. Prepare an income statement for a manufacturing business. Prepare a balance sheet for a manufacturing business. Chapter 25 introduced the topic of managerial accounting. Chapter 26 continues this topic with a discussion of accounting for manufacturing activities—an area that requires regular financial information for managerial decision making relating to operating efficiency. Section 1 Explains how to prepare a statement of cost of goods manufactured for a business which makes a product. In addition, the section describes the basic components of manufacturing cost and how to prepare an income statement and balance sheet for a manufacturing business. Manufacturing . | 1- McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Accounting for Manufacturing Activities Section 1: Accounting for Manufacturing Activities Chapter 26 Section Objectives Prepare a statement of cost of goods manufactured. Explain the basic components of manufacturing cost. Prepare an income statement for a manufacturing business. Prepare a balance sheet for a manufacturing business. Chapter 25 introduced the topic of managerial accounting. Chapter 26 continues this topic with a discussion of accounting for manufacturing activities—an area that requires regular financial information for managerial decision making relating to operating efficiency. Section 1 Explains how to prepare a statement of cost of goods manufactured for a business which makes a product. In addition, the section describes the basic components of manufacturing cost and how to prepare an income statement and balance sheet for a manufacturing business. Manufacturing Businesses Merchandising businesses purchase goods to be resold in the same condition and form but at a profit. Manufacturing businesses purchase and convert raw materials into finished goods to be sold at a profit. Merchandising Businesses Comparison A manufacturing business makes a product from raw materials and then sells it to retailers or merchandisers, who in turn sell the goods to consumers. The Cost of Goods Manufactured line item replaces the Purchases line item on the income statement Statement of Cost of Goods Manufactured Accounting for the cost of raw materials used to make products and the labor and overhead required to turn raw materials into finished products are key elements of an accounting system for a manufacturing concern. The Statement Of Cost Of Goods Manufactured summarizes these costs for a company. The statement of Cost of Goods Manufactured is similar to the Cost of Goods Sold section of an income statement for a merchandiser. There are four parts of the .
