Hi Larry - Sales Clerk = Selling expense (invloved in selling). Property taxes = Administrative expense (Involved in Administration). Factory Supplies = MOH, as it happened in the factory and it's not DM or DL. Depreciation on plant does mean depreciation on factory. Good luck!
please don't ever take these videos down! I wish I found these hen revising in december just gone. this is perfect for my retake! explain it so easy, compared to lecture theatres full of people!
Great video! Everything was explained thoroughly. Now I have a much better understanding. I also like that we can see you and see the problems being worked out at the same time. Thanks again.
+xThePie Thanks - just watching and liking the videos is enough. If you need extra help - check out my website - accountingworkbook.com and tell your friends!!
Gabrielle, this sounds like a "Job order costing" problem. Have a look at my Job order costing videos later on...I really do think they'll help! As to your question, I will answer it as best I can....So with the actual factory overhead, DR MOH, CR Accounts Payable for that amount. For the applied overhead, DR WIP CR MOH for 120% of the Direct labour. Again, this gets explained in detail in the Job Order Costing videos. Cheers! Tony
Thank you Tony. What a great explanation. Trust me, you saved my life :D I've an exam tomorrow and I didnt know anything till the moment I watched this video.
We're interested in how much RM got used. So we now how much we had at the beginning of the year and how much we have left over at the end of the year. We also know how much we purchased. We take the amount we started with, and add our purchases. This tells us the maximum amount we could possibly have used during the year. The ending inventory represents the amount that we DIDN'T use. So we deduct it. Hope this helps!
Thank you so much. I have been having issues wrapping my brain around all of this and my managerial accounting teacher doesn't explain it well. I have a test in 3 days and i'm finally starting to understand. THANK YOU!
On this schedule we are tracking the goods we are making (manufacturing). So if I want to know how much stuff I made, it makes sense to track the stuff that's half-finished...(the WIP). This schedule is all about the goods I am manufacturing, if a good is finished, I am no longer manufacturing it! Hence finished goods don't belong on this schedule. (They go on the schedule of Cost of Goods Sold.)
Awesome. I've given up on my text and really crappy publisher portal reviews. Your content is 1000% better. If you had a library of problems solved with a walk-through, that would be incredible.
I'm guessing that there must be something in the question to indicate that the indirect materials are included with the raw materials. (if so, they need to be deducted from RM and put into MOH.) For the second part, it seems to be a different approach to what I've done, but the fundamentals are the same. DM + DL + MOH. In your case, you get MOH applied, where I give MOH in components. Hope this helps (at least a little!)
You are kind. This is challenging me. Money cannot buy the rewrd you will get from God as you have helped many to succeed. Thanks, although I'm yet to use this.
Depending on the class, this one: Introduction to Managerial Accounting, Second CDN Edition [Paperback] Peter Brewer (Author), Ray Garrison (Author), Eric Noreen (Author), Suresh Kalagnanam (Author), Ganesh Vaidyanathan (Author) or this one: Managerial Accounting, CDN Edition [Hardcover] Ronald Hilton (Author), Michael Favere-Marchesi (Author)
you mr. Tony Bell, are my savior... in all honesty thank you so much for putting out these videos, I'm using it as a review and I'm learning so much and hopefully stays with me for my first exam. Also wondering, did you go over Contribution Margin and CM% already?
You are awesome. I was about to give up in my accounting class and you have made my life so much better.. Do you have videos on Straight-line amortization?
hello tony,if there's a case that have both actual &estimated overhead(budged overhead could be caculated,,and actual manufacturing is listed) question says it use normal costing,so what should I fill in the schedule of cost of goods manufactured? thank you so much
Tony, I really like your videos, congratulations. I wonder if you have videos related to Financial Management concepts (capital budgeting, financial ratios, WACC, etc) or if somehow in the future you would be able to make videos related to these topics. Can you let me know also in which university do you teach. Thank you so much.
Hello Tony, How do account for salaries paid to sales clerk, property taxes on administrative building and factory supplies used? Does depreciation on plant mean factory depreciation?
Hello Sir, thank you for the video. I did have one question. Regarding totalling of the values, is there a DR, CR to this? The way you inputted the values confused me.
Hi sir, I just wanted to ask. Aren't you supposed to deduct the indirect materials to the overall direct materials used before you can add it on the manufacturing overhead?
No easy answer here. It's pretty involved to break it down. Perhaps checking out my videos on "Cost Analysis" will help. Google "Cost Analysis Tony Bell" and you will find my videos on the topic. Sorry, but I really can't tackle this fully in the comments....hope the videos help though!!
Very informative. Question? How would you calculate the raw materials purchases if you are only given raw material beg/ending balances, WIP beg/ending, and finished goods beg/ending balances?
Crystal Bruster We would need to know (or be able to compute the RM Used.) So we know Beginning RM + Purchases - Ending RM = RM Used. If we don't know purchases, then it's a simple rearranging of the formula above. But we must know Beginning, Ending, and RM Used to do it.
Thanks for answering my question on your previous video. Another question I have is, do you always have to put WIP Beg and End after Total Manufacturing Costs ?
+xFlandies So we want to know the cost of goods that were FULLY manufactured. If I have a beginning balance of $1,000 worth of WIP Inventory, I do $10,000 worth of manufacturing, and I end with $2,000 of WIP Inventory, what is the cost of full manufactured goods? It's $9,000. This is the calculation we are doing on the Schedule of COGM.
In my book they give indirect material included in MOH and have you deduct that amount from raw materials used in production. Can you explain to me why that is? Also i am given MOH applied to WIP and add that amount to raw materials used in production. Can you also explain to me why that is also?
i need help a little lost trying to determine the missing data, can u help please if i post the question? been trying to figure it out for hours... HELP ME PLEASE
Tony, I don't know if you can explain me how do companies calculate the Work in Process Inventory for the end of the year. I guess that the Work in Process Inventory at the beginning of the year is taken from the Work in Process Inventory at the end of the previous year, but what about the Work in Process Inventory at the end of an accounting period. How is it calculated by companies. Thank you for your help.
I don't think they calculate it, I think they count it! End of year inventory counts are a standard procedure for most firms (and although I've not dealt with a firm that has WIP, I imagine it gets counted like the rest of the raw materials and finished goods.)
***** In the case you want to get the Cost of Goods Manufactured for a month or for any period of time shorter than a year, would you also need to count the Work in Process Inventory you have at the end of that period. Thank you.
Great video....Q... RM purchased for cash and credit. Do we add these together to get the total RM purchased? or do we only consider the RM purchased for cash.? thanks
jcoby0803 I see I'm late in responding, but I found an example of a Cost of Goods Manufactured Schedule while searching on Google, and this image shows 3 columns, like you mention. The far left is the same column as the left column in Tony's Schedule in this video; the middle column is for the totals of the sums for each of the manufacturing costs (DL, DM, & MOH); then in the far right column which is the same thing as the right column in this video. You just add up those total costs of DL, DM, & MOH from the middle column and put the sum of those in the 3rd column as "Total Manufacturing Costs" and continue with the schedule as usual. Hope this helps! Or at least someone new with the same question! Here is the link to this image: www.solutioninn.com/business/accounting/financial-analysis/incomplete-cost-of-goods-manufactured-schedule
hello there first of all the video is very good ! Now I have a question I have an excercise here with this task "Prepare a schedule of cost of goods manufactured in good form." Do u know what "good form" means, is that what u do a good form ?
"Good form" means "Make it look good!" So proper titles, layout and dollar signs in the right place. The opposite of good form would be "Prepare a rough copy."
DL is for those employees who put their hands on the product during the manufacturing of the product. Literally hands on the product or the machine that makes the product. Supervisory salaries would be classified as indirect labour because a supervisor (at least in this example) doesn't get hands on with the product.
hiruni umagaliyage Not sure, but I'd guess freight out, not, Freight in, it depends on what is getting shipped in, but probably not. Love to know for sure if anyone knows the answer.
Sometimes I see an income statement with depreciation & amortization outside of the MOH. I see an operating income as EBITDA. In other words we'll get higher gross profit margin right? Why don't you do the same?
Fadhil Online There are many, many different formats and purposes for income statements. Any one with EBITDA is more of a finance oriented income statement (for example). Also, depreciation and amortization often happens outside of the factory, so that's not surprising to find it outside of MOH. Cheers!
Keep watching. Finished goods gets dealt with on our Schedule of Cost of Goods Sold. Not the schedule of cost of goods manufactured. (I think it's in the next part of the video.)
Hi Larry - Sales Clerk = Selling expense (invloved in selling). Property taxes = Administrative expense (Involved in Administration). Factory Supplies = MOH, as it happened in the factory and it's not DM or DL. Depreciation on plant does mean depreciation on factory. Good luck!
please don't ever take these videos down! I wish I found these hen revising in december just gone. this is perfect for my retake! explain it so easy, compared to lecture theatres full of people!
Thanks so much - hope your retake goes well :)
best accounting professor on youtube. clear to the point and easy to comprehend. Thumbs up!
Thank you!
I have learned a lot from your videos that I have not learned in my Accounting class. Thank you, Tony!
+Long nguyen Thank you!
You are such a gem, really helped me man. Please don't stop making video because everyone really appreciate it, cheers!
You truly have a gift at explaining things in simple terms. Great job. You may have just saved my grade
Thank you :) Good luck~!
Great video! Everything was explained thoroughly. Now I have a much better understanding. I also like that we can see you and see the problems being worked out at the same time. Thanks again.
Alli A Thanks so much!
Is there anyway I can re-pay you for your hard effort for making this easy and accurate? Love you man !
+xThePie Thanks - just watching and liking the videos is enough. If you need extra help - check out my website - accountingworkbook.com and tell your friends!!
I found this to be both enjoyable and easy to understand. Thanks for taking the time to make these videos.
David McClain Thank you :)
concise, precise, brisk and elaborate! Thank you so much!
Your comment made my night! I love they way you phrased that....
Gabrielle, this sounds like a "Job order costing" problem. Have a look at my Job order costing videos later on...I really do think they'll help!
As to your question, I will answer it as best I can....So with the actual factory overhead, DR MOH, CR Accounts Payable for that amount.
For the applied overhead, DR WIP CR MOH for 120% of the Direct labour.
Again, this gets explained in detail in the Job Order Costing videos. Cheers! Tony
You must be an awesome teacher! This is super easy to follow along. Thank you so much!
+Jessica Gonzalez Thank you!
Hi! Check at 7:55 - It's the total of the material + labour + overhead = 20,000 + 10,000 + 30,000.
Cheers!
Thank you Tony.
What a great explanation.
Trust me, you saved my life :D
I've an exam tomorrow and I didnt know anything till the moment I watched this video.
+Travel Boy Good luck on the exam :)
Thank you.This is a great video! You make this topic much easier to understand!!
honwai11 Thanks!
We're interested in how much RM got used.
So we now how much we had at the beginning of the year and how much we have left over at the end of the year. We also know how much we purchased.
We take the amount we started with, and add our purchases. This tells us the maximum amount we could possibly have used during the year. The ending inventory represents the amount that we DIDN'T use. So we deduct it.
Hope this helps!
Thank you so much. I have been having issues wrapping my brain around all of this and my managerial accounting teacher doesn't explain it well. I have a test in 3 days and i'm finally starting to understand. THANK YOU!
Kate Smoot Thanks! Hope the test went well :)
Thank you. I actually had to postpone it. I will be taking it in about 7 hours. Your videos have been a life saver.
this is wonderful and so easy to learn from!! Cannot thank you enough!
Thank you! This video is much easier to understand than the giant chapter in my textbook. It really helped me a lot, thanks again!
***** Thanks!
On this schedule we are tracking the goods we are making (manufacturing). So if I want to know how much stuff I made, it makes sense to track the stuff that's half-finished...(the WIP). This schedule is all about the goods I am manufacturing, if a good is finished, I am no longer manufacturing it! Hence finished goods don't belong on this schedule. (They go on the schedule of Cost of Goods Sold.)
You're the best! I take A+ in my final Exam!! Thx for help me 🙏🏻🙏🏻🙏🏻🙏🏻🙏🏻🙏🏻🙏🏻🙏🏻🙏🏻🙏🏻🙏🏻🙏🏻💙💙💙💙💙💙💙💙💙💙💙* from saudi*
Hi Rod,
I use software called Camtasia to record the screen and I use a Wacom tablet to do hand writing.
Tony
Awesome. I've given up on my text and really crappy publisher portal reviews. Your content is 1000% better. If you had a library of problems solved with a walk-through, that would be incredible.
zymurgy9827 Thank you!!
Wish you were my teacher! A big thank you for the great vid and the clear explanation
Thanks!
Thank you so much!!!! I was so confused and you made it so easy to understand. THANK YOU!!!!!
Lillian Barnes-Smith Thanks!!
I'm guessing that there must be something in the question to indicate that the indirect materials are included with the raw materials. (if so, they need to be deducted from RM and put into MOH.)
For the second part, it seems to be a different approach to what I've done, but the fundamentals are the same. DM + DL + MOH. In your case, you get MOH applied, where I give MOH in components. Hope this helps (at least a little!)
Thanks Tony! You are the best!
Thanks :)
thanks man, I am going to ace my test and I find this interesting and fun. guess I'm in the right field
You are so much help. Thank you for your videos !!!!
Thank you. I like your video. It helps me in understanding the material.
great job. I was confused but now I am cleared about it. thank you so much:)
You are kind. This is challenging me. Money cannot buy the rewrd you will get from God as you have helped many to succeed.
Thanks, although I'm yet to use this.
Iyanu Oluyale Thank you and good luck in your studies.
Thanks!
Good luck on that test!
Thanks! Good luck in your class :)
Thank you!! This really made things so much easier for me to understand. :)
+Lily Callaghan Thank you :)
Thanks!!
Depending on the class, this one:
Introduction to Managerial Accounting, Second CDN Edition [Paperback]
Peter Brewer (Author), Ray Garrison (Author), Eric Noreen (Author), Suresh Kalagnanam (Author), Ganesh Vaidyanathan (Author)
or this one:
Managerial Accounting, CDN Edition [Hardcover]
Ronald Hilton (Author), Michael Favere-Marchesi (Author)
Thanks! I like the way you explain.
Thank you so much! This was super helpful. -Student from UWaterloo.
Thanks for being a good speller!
Good speller/Messy writer! Thanks :)
Awesome video doing online class and this is a great help
+mike snyder Thank you!
THANK YOU SO MUCH TONY
+Juan Merino thank you :)
Your tutorial is great thanks so much!
you mr. Tony Bell, are my savior...
in all honesty thank you so much for putting out these videos, I'm using it as a review and I'm learning so much and hopefully stays with me for my first exam.
Also wondering, did you go over Contribution Margin and CM% already?
Thank you, thank you, thank you!!!
Thank you very much for your effort! I really appreciate your acctg. vdeos that I downloaded everything..amazing prof.
Estrelita Meneses Thanks!!
Thanks~!~~!
thankyou very much :) i wish that i pass my midterm exam after listening to your lecture 😭✌️😇
beverlyjean pacheco Thanks!!
u are great sir
Sorry, I'm not able to help on individual homework assignments. Hope you are able to find the answer though!
You are awesome. I was about to give up in my accounting class and you have made my life so much better.. Do you have videos on Straight-line amortization?
Thanks - I do have a series on amortization. Google my name and amortization. You will find the videos!
Thank you!
This was very, very, very helpful, thank you. I understood everything except WIP. Why did you add beginning and deduct ending?
Thanks Tony for videos. Should have chose you as a Prof.
Thanks~!
hello tony,if there's a case that have both actual &estimated overhead(budged overhead could be caculated,,and actual manufacturing is listed) question says it use normal costing,so what should I fill in the schedule of cost of goods manufactured?
thank you so much
Tony - great stuff! Thank you. BTW, what software do you use to make these videos?
Tony, I really like your videos, congratulations. I wonder if you have videos related to Financial Management concepts (capital budgeting, financial ratios, WACC, etc) or if somehow in the future you would be able to make videos related to these topics. Can you let me know also in which university do you teach. Thank you so much.
Hi Charlie - I'm honestly not sure what to make of your situation - sorry! Hope you're able to find the answer.
You are awesome, so very awesome.
I have to work on schedule of costs for a assisted living facility. Do you have any video on that one? or can you help in that one please. Thank you
Hey Tony, why do we deduct the raw materials inventory?
At around 3:40 in the video
Thanks
Hello Tony,
How do account for salaries paid to sales clerk, property taxes on administrative building and factory supplies used? Does depreciation on plant mean factory depreciation?
Hello Sir, thank you for the video. I did have one question. Regarding totalling of the values, is there a DR, CR to this? The way you inputted the values confused me.
Thanks Dr.Bell I had HW due for class in little less than an hour will subscribe thanks a lot
Thanks! Glad it helped :) PS Not a doctor, so just call me Tony ;)
Man you are awesome !
muhammad rashad Thanks!!
Hi, I'm just wondering what textbook is used in your class. Thanks for the videos!
Hi sir, I just wanted to ask. Aren't you supposed to deduct the indirect materials to the overall direct materials used before you can add it on the manufacturing overhead?
No easy answer here. It's pretty involved to break it down.
Perhaps checking out my videos on "Cost Analysis" will help. Google "Cost Analysis Tony Bell" and you will find my videos on the topic.
Sorry, but I really can't tackle this fully in the comments....hope the videos help though!!
Is it transportation-in on raw materials purchased doesn't need to add in MOH? thanks
Very informative. Question? How would you calculate the raw materials purchases if you are only given raw material beg/ending balances, WIP beg/ending, and finished goods beg/ending balances?
Crystal Bruster We would need to know (or be able to compute the RM Used.)
So we know Beginning RM + Purchases - Ending RM = RM Used.
If we don't know purchases, then it's a simple rearranging of the formula above. But we must know Beginning, Ending, and RM Used to do it.
You have a gift, Sir .........nicely done and it was helpful. Is there any video of MOH Over applied / Under applied?
kazi tausif I sure do...check my videos on Job Order Costing.
you the best...
millicent ramusi Thanks!
Thanks for answering my question on your previous video. Another question I have is, do you always have to put WIP Beg and End after Total Manufacturing Costs ?
+xFlandies So we want to know the cost of goods that were FULLY manufactured. If I have a beginning balance of $1,000 worth of WIP Inventory, I do $10,000 worth of manufacturing, and I end with $2,000 of WIP Inventory, what is the cost of full manufactured goods? It's $9,000. This is the calculation we are doing on the Schedule of COGM.
In my book they give indirect material included in MOH and have you deduct that amount from raw materials used in production. Can you explain to me why that is?
Also i am given MOH applied to WIP and add that amount to raw materials used in production. Can you also explain to me why that is also?
Thx!
Hey Tony one more question, does variable and fixed costs go into MOH?
If yes, why?
hi tony how can we identify if how much is total variable cost and total fixed cost ?
i need help a little lost trying to determine the missing data, can u help please if i post the question? been trying to figure it out for hours...
HELP ME PLEASE
Would like to ask more of topics about international accounting
doctor edith I will be updating videos in the future, but for now, these are the only videos I have available.
Why is WIP be included with Scheduled of Cost of Good Manufactured but not Finished good for beginning and ending?
What if there is an actual factory overhead and then noted in problem that factory overhead is applied at 120% of Direct labor
If we have factory insurance where gonna Classification it??
i love youuuuuuuuuuuuuuuuuuuuuuuuu............my hero
Hi,
I have a question, How do you get the total manufactured cost? I mean the 60,000
Tony, I don't know if you can explain me how do companies calculate the Work in Process Inventory for the end of the year. I guess that the Work in Process Inventory at the beginning of the year is taken from the Work in Process Inventory at the end of the previous year, but what about the Work in Process Inventory at the end of an accounting period. How is it calculated by companies. Thank you for your help.
I don't think they calculate it, I think they count it! End of year inventory counts are a standard procedure for most firms (and although I've not dealt with a firm that has WIP, I imagine it gets counted like the rest of the raw materials and finished goods.)
***** In the case you want to get the Cost of Goods Manufactured for a month or for any period of time shorter than a year, would you also need to count the Work in Process Inventory you have at the end of that period. Thank you.
Great video....Q... RM purchased for cash and credit. Do we add these together to get the total RM purchased? or do we only consider the RM purchased for cash.? thanks
luchen govender Definitely consider all RM purchased, both cash and credit!
What is the concept of depreciation of factory equipment or any other depreciation? Is it that they are losing money on that certain item? Thank you.
I have a video series on depreciation/amortization: Accounting - Unit 7 - Part 1 - Straight-Line Amortization
too good
On my assignment, there is 'Machinery purchase' . Does that comes under MOH?
Stacey van straten I'd say no, but any depreciation on the machinery would be.
Purchases of direct material during the month should they be counted?
mike vincent Yes - definitely.
On my assignment there is three columns for the numbers on the Cost of Goods Manufactured Schedule, What do they mean?
jcoby0803 Not sure...as you can see, I use two!
jcoby0803 I see I'm late in responding, but I found an example of a Cost of Goods Manufactured Schedule while searching on Google, and this image shows 3 columns, like you mention.
The far left is the same column as the left column in Tony's Schedule in this video; the middle column is for the totals of the sums for each of the manufacturing costs (DL, DM, & MOH); then in the far right column which is the same thing as the right column in this video. You just add up those total costs of DL, DM, & MOH from the middle column and put the sum of those in the 3rd column as "Total Manufacturing Costs" and continue with the schedule as usual.
Hope this helps! Or at least someone new with the same question!
Here is the link to this image: www.solutioninn.com/business/accounting/financial-analysis/incomplete-cost-of-goods-manufactured-schedule
how production of unit applied to cost of goods manufactured
hello there first of all the video is very good ! Now I have a question I have an excercise here with this task "Prepare a schedule of cost of goods manufactured in good form."
Do u know what "good form" means, is that what u do a good form ?
"Good form" means "Make it look good!" So proper titles, layout and dollar signs in the right place. The opposite of good form would be "Prepare a rough copy."
Excuse my accounting ignorance but why is the supervisors salary of $5000 not part of the Direct Labour Cost? Kind Regards
DL is for those employees who put their hands on the product during the manufacturing of the product. Literally hands on the product or the machine that makes the product. Supervisory salaries would be classified as indirect labour because a supervisor (at least in this example) doesn't get hands on with the product.
hi Tony
are freight in and out costs MOH?
hiruni umagaliyage Not sure, but I'd guess freight out, not, Freight in, it depends on what is getting shipped in, but probably not. Love to know for sure if anyone knows the answer.
Sometimes I see an income statement with depreciation & amortization outside of the MOH. I see an operating income as EBITDA. In other words we'll get higher gross profit margin right? Why don't you do the same?
Fadhil Online There are many, many different formats and purposes for income statements. Any one with EBITDA is more of a finance oriented income statement (for example). Also, depreciation and amortization often happens outside of the factory, so that's not surprising to find it outside of MOH. Cheers!
hi! just a question why don't you add and deduct the finished good to the schedule?
Keep watching. Finished goods gets dealt with on our Schedule of Cost of Goods Sold. Not the schedule of cost of goods manufactured. (I think it's in the next part of the video.)
Oh yeah I saw my bad! thanks
Sir is Advertising expenses part of MOH?
Thank you
no, its selling expense
Wang Chelsea Thanks!
millicent ramusi Wang Chelsea is right...it's a separate selling expense.
come teach at Boise state :( my teacher blows