Accounting Tools

NOVEMBER 1, 2023

Direct Materials Direct materials is the cost of those materials directly associated with the production of goods. It can also include the cost of materials destroyed during the setup and testing of production equipment, as well as a normal amount of scrap.

Cost Accounting 75

Cost Accounting Accounting Accounting 75

Accounting Tools

APRIL 7, 2024

Related Articles Accounting for Manufacturing Businesses Indirect Manufacturing Costs Manufacturing Cost Accounting Manufacturing Overhead Rate Non-Manufacturing Overhead Costs Total Manufacturing Cost Whatever allocation method used should be employed on a consistent basis from period to period.

Cost Accounting 75

Cost Accounting Financial Statements Financial Reporting Auditing 75

Accounting Tools

MAY 1, 2024

The stores term refers to the materials maintained by a business in inventory. In either case, an inventory tracking system is needed to ensure that the materials management staff has correct information about the number of units on hand. What are Stores? This approach is used for more expensive items.

Computation 40

Computation 40

Accounting Tools

APRIL 29, 2024

It is comprised of material, labor, and overhead components, and is typically recorded within a bill of materials. Any material unfavorable variances should be reviewed by management to see if any corrective actions can be taken. Related Articles Is Standard Costing Allowable in GAAP and IFRS?

Budgeting 40

Budgeting Cost Accounting Billing Accounting 40

Accounting Tools

NOVEMBER 2, 2023

The number of finished goods produced is the multiplier in the backflush equation, so an incorrect count will relieve an incorrect amount of components and raw materials from stock. Requires an accurate bill of materials. Related Articles Accounting for Inventory The Difference Between Periodic and Perpetual Inventory Systems

Accounting 75

Accounting Accounting Billing Computation 75

Accounting Tools

SEPTEMBER 7, 2023

Related Articles Accounting for Manufacturing Businesses Cost Accounting Basics Cost of Goods Sold Journal Entry How to Calculate the Cost of Goods Sold Is the Cost of Goods Sold an Expense? It is primarily used in financial accounting , as part of the process of compiling the financial statements.

Financial Statements 75

Financial Statements Cost Accounting Auditing Financial Accounting 75

CSI Accounting & Payroll

OCTOBER 13, 2023

If your construction company has a contract that rolls into a new year , you must accrue for the materials, revenue, and labor involved in the contract - even if you use cash basis accounting for your business. This article will walk you through classifying your contracts and business to determine whether CCM or PCM is right for you.

Accruals 98

Accruals Accounting Accounting Payroll 98

Accounting Tools

JANUARY 24, 2024

What is the Direct Material Mix Variance? Direct material mix variance is the difference between the budgeted and actual mixes of direct material costs used in a production process. The variance is useful for determining whether a lower-cost mix of materials can be used to create a product.

Budgeting 40

Budgeting Cost Accounting Accounting Accounting 40

Accounting Tools

NOVEMBER 24, 2023

An operating cycle is the time period from when materials are acquired for production or resale to the point when cash is received from customers in payment for those materials or the products from which they are derived. Related Articles Net Current Assets Operating Current Assets Other Current Assets

Accounts Receivable 72

Accounts Receivable Accounts Receivable Account Receivables Accounting 72

Accounting Tools

FEBRUARY 13, 2024

What is Materiality? Materiality is the threshold above which missing or incorrect information in financial statements is considered to have an impact on the decision making of users. Examples of Materiality It is helpful to review several examples of the materiality concept, to better understand how it impacts a business.

Financial Statements 40

Financial Statements Accounting Accounting 40

Accounting Tools

JANUARY 30, 2024

What is the Material Yield Variance? The material yield variance is the difference between the actual amount of material used and the standard amount expected to be used, multiplied by the standard cost of the materials. Material quality. Here are several reasons: Scrap. Freight in issues.

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

MARCH 25, 2024

They are as follows: Material handling costs. There can be substantial costs associated with the movement of raw materials, work-in-progress, and finished goods within a production facility. This includes equipment calibration, as well as the loss of materials during test runs.

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

APRIL 14, 2024

Materials Shortage Issue There is an industry shortage of a commodity item, which is driving up the cost. Another option is to enter into a contract with a supplier to obtain a fixed proportion of its capacity; this can be expensive, but ensures that you have access to a sufficient quantity of the necessary materials.

Budgeting 40

Budgeting Collections Cost Accounting Accounting 40

Accounting Tools

MAY 7, 2024

These measurements can be used to examine the performance of all aspects of a business, including the accounting, engineering, finance, marketing, materials management, production, research, and sales departments. Related Articles Accounting Ratios Activity Ratios Efficiency Ratios Operating Performance Ratios

Financial Statements 40

Financial Statements Collections Accounts Receivable Accounts Receivable 40

Accounting Tools

JANUARY 9, 2024

What is a Material Requisition Form? A material requisition form lists the items to be picked from inventory and used in the production process or in the provision of a service to a customer, usually for a specific job. They are especially interested in whether material requisitions are being appropriately approved.

Reconciling 40

Reconciling Auditing Invoicing 40

Accounting Tools

JUNE 16, 2023

For a manufacturer, these costs include direct materials , direct labor , freight in , and manufacturing overhead. Manufacturing overhead can include such costs as equipment depreciation , rent on the factory building, production management salaries, materials management staff compensation, factory utilities, maintenance parts, and so forth.

Auditing 75

Auditing Cost Accounting Accounting Accounting 75

Accounting Tools

MARCH 19, 2024

A materials handling person moves the bin or pallet to the production area. If a parts return is caused by an incorrect quantity on the related bill of materials , an authorized engineering person alters the unit quantity in the bill of materials record. Related Article Zone Picking

Computation 40

Computation Billing 40

Accounting Tools

JUNE 12, 2023

A high level of efficiency implies a minimal amount of wasted time, effort, capacity, materials, and so forth. Material Yield Variance The material yield variance is the actual number of units used minus the standard amount expected to be used, multiplied by the standard cost per unit.

Financial Analysis 75

Financial Analysis Cost Accounting Accounting Accounting 75

Accounting Tools

MARCH 22, 2024

Types of Audit Risk There are three types of audit risk, which are as follows: Control risk , which is the risk that potential material misstatement would not be detected or prevented by a client’s control systems. Detection risk , which is the risk that the audit procedures used are not capable of detecting a material misstatement.

Auditing 40

Auditing Financial Statements 40

Accounting Tools

NOVEMBER 1, 2023

Related Courses Accounting for Inventory Cost Accounting Fundamentals How to Audit Inventory What is Direct Material Cost? Direct material cost is the cost of the raw materials and components used to create a product. The total is the direct material cost of the product.

Cost Accounting 40

Cost Accounting Budgeting Billing Auditing 40

Accounting Tools

MAY 4, 2024

This means that there is actually a significant risk of a material misstatement, which can lead to an incorrect auditor’s opinion on a client’s financial statements. They are as follows: Risk of incorrect acceptance. An auditor erroneously concludes that there are fewer problems with the population than expected. Risk of incorrect rejection.

Auditing 40

Auditing Financial Statements 40

Accounting Tools

OCTOBER 11, 2023

It includes all possible costs incurred by the production function, including direct materials , direct labor , and factory overhead. For this situation, the calculation of total manufacturing cost is as follows: Direct materials. The result is the cost of direct materials incurred during the period. Direct labor.

Payroll 75

Payroll Cost Accounting Budgeting Tax 75

Accounting Tools

DECEMBER 22, 2023

Direct Materials The job costing must be able to track the cost of materials that are used or scrapped during the course of the job. The system can compile this cost through the manual tracking of materials on cost sheets , or the information can be charged by using on-line terminals in the warehouse and production area.

Billing 75

Billing Computation Cost Accounting Accounting 75

Accounting Tools

OCTOBER 8, 2023

If not, the mix of products has changed, the sales department has altered prices, or the cost of materials or labor has changed. If the variance is unfavorable, it can indicate that the company is buying materials at a higher cost than anticipated, or that it is buying in smaller volumes than expected.

Cost Accounting 75

Cost Accounting Accounting Accounting Budgeting 75

Accounting Tools

DECEMBER 28, 2023

Indirect labor is the cost of any labor that supports the production process, but which is not directly involved in the active conversion of materials into finished products. Indirect labor also refers to many types of administrative labor positions, such as any accounting, marketing, or engineering position.

Financial Analysis 40

Financial Analysis Cost Accounting Payroll Tax 40

Accounting Tools

SEPTEMBER 26, 2023

Related Courses Inventory Management Purchasing Guidebook What is Exploding the Bill of Materials? Exploding the bill of materials means breaking down the bill of materials for a product into its constituent parts. Related Articles Expenditure Cycle Purchasing System Spend Management

Billing 40

Billing 40

Accounting Tools

AUGUST 8, 2023

Related Courses Inventory Management What is Material Requirements Planning? Material requirements planning (MRP) is a computer-driven production scheduling and inventory management system. The system optimizes the flow of materials through a "push" production system.

Computation 40

Computation Billing 40

Accounting Tools

NOVEMBER 3, 2023

The iron curtain method is a technique for determining whether a financial misstatement is material. This tends to result in a larger proportion of misstatements being considered material, which calls for a financial statement correction. A material impact anywhere in the financial statements is adequate grounds for a restatement.

Financial Statements 40

Financial Statements Accounting Accounting 40

Accounting Tools

AUGUST 23, 2023

Related Courses Accounting Controls Guidebook What is a Material Weakness? A material weakness arises when an internal control over financial reporting is found to be ineffective. When the auditors find a material weakness, they must notify the audit committee of this issue.

Financial Statements 40

Financial Statements Financial Reporting Auditing Accounting 40

Accounting Tools

OCTOBER 12, 2023

Conversion costs are those production costs required to convert raw materials into completed products. Thus, the essential difference is that prime costs do not include the factory overhead costs that are included in conversion costs, while conversion costs do not include the direct material costs that are included in prime costs.

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

JANUARY 30, 2024

Causes of FISH Inventory FISH inventory can have many causes, including unexpectedly low sales , excessive inventory purchases, and poor materials management. The result is a large amount of unused inventory sitting in the warehouse.

Auditing 40

Auditing Accounting Accounting 40

Accounting Tools

JUNE 14, 2023

A financial statement review is a service under which the accountant obtains limited assurance that there are no material modifications that need to be made to an entity's financial statements for them to be in conformity with the applicable accounting framework (such as GAAP or IFRS ). Are there any material contractual obligations?

Financial Statements 75

Financial Statements Auditing Accruals Financial Reporting 75

Accounting Tools

JULY 19, 2023

Related Courses Cost Accounting Fundamentals What is a Material Variance? Material variance has two definitions, one relating to direct materials and the other to the size of a variance. It is useful for determining the ability of a business to incur materials costs close to the levels at which it had planned to incur them.

Financial Statements 40

Financial Statements Cost Accounting Accounting Accounting 40

Accounting Tools

APRIL 25, 2024

This is an essential function for incoming materials, though it can be sidestepped for receipts from suppliers that have been pre-certified as having met certain quality standards. Related Articles Receiving Controls (podcast) Receiving Procedure Receiving Report What is Receiving in Business?

Accounts Payable Clerk 40

Accounts Payable Clerk Purchase Order Computation Accounts Payable 40

Accounting Tools

NOVEMBER 20, 2023

The actual price paid for materials used in the production process, minus the standard cost, multiplied by the number of units used. Material yield variance. Subtract the total standard quantity of materials that are supposed to be used from the actual level of use and multiply the remainder by the standard price per unit.

Budgeting 75

Budgeting Financial Analysis Billing Cost Accounting 75

Accounting Tools

APRIL 24, 2024

Instead, any material mix of the two cost types qualifies a cost as semi-fixed. Related Articles Fixed Charges Mixed Cost Semi-Variable Cost Step Fixed Cost Step Variable Cost A cost that is classified as semi-fixed does not have to contain a certain proportion of fixed costs or variable costs to be classified as such.

Cost Accounting 75

Cost Accounting Budgeting Billing Accounting 75

Accounting Tools

OCTOBER 22, 2023

Reliability The information must be free of material error and bias, and not misleading. Related Articles Limitations of Financial Statements The Elements of Financial Statements The Relationship Between Financial Statements

Financial Statements 75

Financial Statements Accounting Accounting 75