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Accounting for Production Costs

Chapter 6 discusses accounting for production cycles in business, detailing various accounts such as Direct Material costs, salary payments, and social insurance contributions. It provides examples of transactions related to material issuance, wage payments, and utility expenses, emphasizing the importance of accurate journal entries. The chapter concludes with a practical exercise on journalizing transactions and calculating the cost of finished goods.

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12 views11 pages

Accounting for Production Costs

Chapter 6 discusses accounting for production cycles in business, detailing various accounts such as Direct Material costs, salary payments, and social insurance contributions. It provides examples of transactions related to material issuance, wage payments, and utility expenses, emphasizing the importance of accurate journal entries. The chapter concludes with a practical exercise on journalizing transactions and calculating the cost of finished goods.

Uploaded by

dungdt4110
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Chương 6:

Accounting for different cycles in


business

1-1
Part 1

Accounting for
production

1-2
I. ACCOUNTING FOR
PRODUCTION
Dr 621 Cr Dr 154 Cr Dr 155 Cr Dr 632 Cr
O.B: X

(1)
A A

Dr 622 Cr
(4) Cost of (5) Cost of
Collect M M N N
(1) finished goods sold
expense
B B goods

Dr 627 Cr
M=X+A+B+C
-Y
(1)
C C
C.B: Y
1. Accounting for Account 621

Dr 152 Cr 621 Có

(1): Issue material for


directly production

Transaction: Issue materials for directly production


Dr Direct Material costs:
Cr Materials
2. Accounting for Account 622

Dr 111,112 Cr Dr 334 Cr Dr 622 Cr

(2) Pay salary in cash (1) Salary payable for


employees who directly
89,5% x Salary make the products

(3a) Social insurance, medical insurance,


union fee, unemployment insurance
(Part: Employee)

10,5% x Salary
Nợ 338 Có

(3b) Social insurance,


medical insurance, union
fee, unemployment
insurance (Part: Company)
23,5% x Salary
Social insurance, medical insurance,
union fee, unemployment insurance
Table: Percentage
Item Company Employees

Social insurance 17.5% 8%

Medical insurance 3% 1,5%

Unemployment 1% 1%
insurance
Union fee 2% 0%

Total 23.5% 10.5%


2. Accounting for Account 627
– Part 1
Dr 111,112 Cr Dr 334 Cr Dr 627 Cr

(2) Pay salary in cash (1) Salary payable for


supervisors working at
89,5% x Salary factory

(3a) Social insurance, medical insurance,


union fee, unemployment insurance
(Part: Employee)

10,5% x Salary
Dr 338 Cr

(3b) Social insurance,


medical insurance, union
fee, unemployment
insurance (Part: Company)
23,5% x Salary
3. Accounting for Account 627
– Part 2
Dr 111,112,331 Cr Dr 627 Cr

(5): Utilities incurred in factory

(6): Repair expense for machinery at factory

Nợ 133 Có

Dr 214 Cr

(7): Depreciation of machinery at factory

Dr 153 Cr
(8): Issue supplies for factory

Dr 152 Cr
(9): Issue material for managerial production
Example
A company has several information as follows:

+ Transaction 1: Issue material for direct production and for


managerial production with an amount of 40 million and 20
million VND, respectively

+ Transaction 2: Wage Payable for employees those who


directly make production is 80 million, for supervisors in
factory are 80, for salesman is: 30 million VND and for
managerial staffs is 40 million VND
Example
A company has several information as follows:

+ Transaction 3: Conduct the transactions of social


insurance, health insurance, union fees and unemployment
insurances in accordance with legal regulations

+ Transaction 4: Pays salary to employees by using cash at


bank

+ Transaction 5: Electricity expenses incurs in factory is 15


million VND, in selling shop is 20 million and in office is 7
million VND and all amounts still owes to supplier
Example
A company has several information as follows:
+ Transaction 6: Depreciation for machinery for
production is 10 million VND, for selling shop is 8
million VND and for office is 5 million VND
+ Transaction 7: Company produces 1,000 finished
goods and put them in the warehouse
Require:
a. Journalize transactions
b. Calculate cost of 1 finished goods

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