Question

Number the following in the order of the flow of manufacturing costs for a company.

Answer 1

Answer:

B. Materials purchased.

F. Materials requisitioned to jobs.

C. Factory labor used and factory overhead incurred in production.

E. Factory overhead applied to jobs according to the predetermined overhead rate.

D. Completed jobs moved to finished goods.

A. Closing under/overapplied factory overhead to Cost of Goods Sold.

G. Selling of finished product.

H. Preparation of financial statements to determine gross profit.

Explanation:

Manufacturing costs can be defined as the overall costs associated with the acquisition of resources such as materials and the cost of converting these raw materials into finished goods. Manufacturing costs include direct labor costs, direct materials cost and manufacturing overhead costs.

The order of the flow of manufacturing costs for a company in an ascending order is;

1. Materials purchased.

2. Materials requisitioned to jobs.

3. Factory labor used and factory overhead incurred in production.

4. Factory overhead applied to jobs according to the predetermined overhead rate.

5. Completed jobs moved to finished goods.

6. Closing under/overapplied factory overhead to Cost of Goods Sold.

7. Selling of finished product.

8. Preparation of financial statements to determine gross profit.