Tag Archives for " cost of goods sold "

3 Types of Companies in Managerial Accounting

It is important to identify the type of company you are working within managerial accounting. Depending on the type of company, you will identify different costs and set up reports differently. There are

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Income Statements for Merchandising Companies and Cost of Goods Sold

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 merchandising

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Cost of Goods Sold and The Income Statement for Manufacturing Companies

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 to

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Applied Overhead Versus Actual Overhead

In the previous post, we discussed using the predetermined overhead rate to apply overhead to jobs. This applied overhead is an approximation. What about actual spending for overhead costs? Let’s

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The Traditional Income Statement (Absorption Costing Income Statement)

The traditional income statement, also called absorption costing income statement,  uses absorption costing to create the income statement. This income statement looks at costs by dividing

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Introduction to Periodic and Perpetual Inventory

What is Inventory? Inventory is an asset account composed of items a company is planning to sell to customers. In financial accounting, we deal primarily with merchandising companies. A merchandiser is

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