### Lesson Plan: Financial Accounting - Manufacturing Account III
#### Grade Level:
Senior Secondary 2
#### Subject:
Financial Accounting
#### Duration:
2 periods (80 minutes total)
#### Topic:
Manufacturing Account III
#### Objectives:
1. Students will understand the structure and components of a Manufacturing Account.
2. Students will be able to prepare a Manufacturing Account.
3. Students will grasp the concepts of prime cost, factory overheads, and total manufacturing costs.
4. Students will analyze the difference between a Manufacturing Account and a Trading Account.
#### Materials Needed:
- Whiteboard and markers
- Projector and computer for presentation slides
- Textbooks
- Worksheets for practice
- Calculators
- Sample financial statements
#### Key Terms and Concepts:
- Manufacturing Account
- Prime Cost
- Factory Overheads
- Total Manufacturing Costs
- Finished Goods
- Work-in-Progress
- Trading Account
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### Lesson Outline:
#### Introduction (10 minutes)
1. **Recap Previous Lesson:**
- Quick review of Manufacturing Account I and II.
- Discuss the importance and purpose of a Manufacturing Account.
2. **Lesson Overview:**
- Explain that today we will dive into the third segment of the Manufacturing Account series.
- Introduce the objectives of the lesson.
#### Body (60 minutes)
1. **Structure of a Manufacturing Account (15 minutes):**
- Introduction to the format of a Manufacturing Account.
- Explain the major sections: Prime Cost, Factory Overheads, Total Manufacturing Costs.
- Use a diagram to visually break down each section.
2. **Detailed Breakdown (15 minutes):**
- **Prime Cost:**
- Direct Materials: Explain direct materials used, beginning and ending inventory.
- Direct Labor: How to compute direct labor costs.
- Direct Expenses: Other direct costs associated with manufacturing.
- **Factory Overheads:**
- Define and give examples of factory overheads including indirect materials and labor, depreciation, utilities, etc.
- **Total Manufacturing Costs:**
- Summing Prime Cost and Factory Overheads to get the Total Manufacturing Costs.
- Discuss the movement of WIP (Work-in-Progress) and Finished Goods through the accounting cycle.
3. **Comparison with Trading Account (10 minutes):**
- Highlight differences between Manufacturing and Trading Accounts.
- Discuss how the Manufacturing Account feeds into the Trading Account and its importance in determining the cost of goods sold.
4. **Example Walkthrough (10 minutes):**
- Present a sample problem with numbers.
- Walk students through the preparation of a Manufacturing Account step-by-step.
- Encourage questions and active participation.
#### Practice and Application (20 minutes)
1. **Worksheet Activity:**
- Hand out worksheets with problems related to preparing a Manufacturing Account.
- Students work individually or in small groups to complete the worksheet.
2. **Class Discussion:**
- Review the completed worksheets.
- Discuss any common errors or points of confusion.
- Provide solutions and clarifications as needed.
#### Conclusion and Questions (10 minutes)
1. **Summary:**
- Recap the key points covered in the lesson.
- Reinforce the importance of each section in the Manufacturing Account.
2. **Q&A Session:**
- Open the floor to any remaining questions.
- Clarify any lingering doubts or complex points.
3. **Homework Assignment:**
- Assign homework problems related to Manufacturing Account III.
- Ensure the assignment reinforces the day's lesson.
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#### Assessment:
- Completion and accuracy of worksheet problems.
- Participation during class discussions and activities.
- Performance on homework assignments.
- Observation of students' ability to explain the differences between Manufacturing and Trading Accounts.
#### Reflection:
- After the lesson, take note of any areas where students struggled or were particularly engaged.
- Reflect on the pacing and effectiveness of the lesson for future improvements.
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This lesson plan aims to provide a clear and structured understanding of Manufacturing Account III, ensuring students gain practical skills in preparing these accounts and understanding their significance in Financial Accounting.