Merchandising companies sell products but do not make them. Therefore, these companies will have cost of goods sold but the calculation is much easier than for a manufacturing company. Expenses for a merchandisingLearn More
Manufacturing companies are companies that make a product. Because these companies have inventory in various stages of production, there are three inventory accounts that we must deal with in order toLearn More
When overhead is overapplied or underapplied, there are two different ways to allocated the variance. In the previous post, we allocated all of the variance to cost of goods sold. However, that is notLearn More
Sometimes a single predetermined overhead rate causes costs to be misallocated. Imagine you are renting an apartment with three friends. The rent is $600 per month, cable is $150 per month, and groceriesLearn More
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