Tag Archives for " cost of goods sold "

The Traditional (Absorption Costing) Income Statement

The traditional income statement uses absorption costing to create the income statement. This income statement looks at costs by dividing costs into product and period costs. In order to complete this

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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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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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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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Types of companies

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

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