Lesson Notes By Weeks and Term - Senior Secondary 2
Manufacturing account IV
Manufacturing account IV
Term: 1st Term
Week: 4
Class: Senior Secondary School 2
Age: 16 years
Duration: 40 minutes of 2 periods each
Date:
Subject: Financial accounting
Topic:- Manufacturing account IV
SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to
INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source
INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures
INSTRUCTIONAL PROCEDURES
PERIOD 1-2
|
PRESENTATION |
TEACHER’S ACTIVITY |
STUDENT’S ACTIVITY |
|
STEP 1 INTRODUCTION |
The teacher reviews the previous lesson on manufacturing account |
Students pay attention |
|
STEP 2 EXPLANATION |
She explains the differences between the trading account and the manufacturing account
|
Students pay attention and participates |
|
STEP 3 DEMONSTRATION |
She shows the learners how to prepare manufacturing statement and income statement |
Students pay attention and participate |
|
STEP 4 NOTE TAKING |
The teacher writes a summarized note on the board |
The students copy the note in their books |
NOTE
MANUFACTURING ACCOUNT
DIFFERENCES BETWEEN MANUFACTURING ACCOUNT AND TRADING ACCOUNT
The manufacturing account helps to better the cost-effectiveness of
manufacturing activities. After the ascertainment of the costs of finished
goods, we need to transfer this cost to Trading Account.
The trading account shows Gross Profit. Whereas, the Manufacturing Account depicts the cost of goods sold and also includes
direct expenses. Manufacturing account addresses the raw material and
work in progress and does not deal with the finished goods.
We debit all the direct production expenses such as depreciation on plant
and machinery and factory building, repairs on plant and machinery and
factory building, salary to the factory manager, wages, cartage on raw
materials, etc.
Thus, the cost of finished goods includes the cost of raw materials and all
direct expenses. All indirect expenses form a part of the Profit and Loss A/c
EXAMPLES.
The following information is available from the books of a manufacturing
company. Using this information, prepare the company's manufacturing
statement and income statement (in vertical form).
SOLUTION
EVALUATION: 1. Differentiate between manufacturing account and trading account
available in respect of his manufacturing activities for the year ended on
31.03.2018
|
Opening work-in-progress (4,000 units) |
8,000 |
|
Closing work-in-progress (5,000 units) |
10,000 |
|
Opening stock of Raw materials |
75,000 |
|
Closing stock of Raw materials |
85,000 |
|
Purchase of raw material |
4,20,000 |
|
Hire charges of machine@$0.50 per unit manufactured |
|
|
Rent of factory |
1,50,000 |
|
Direct wages- @$0.70 per unit manufactured and @$0.30 per unit of closing W.I.P |
|
|
Repairs and maintenance |
100,000 |
|
units produced-2,60,000 |
Prepare a manufacturing Account of Mr. Prasad for the year ended
31.03.2018.
CLASSWORK: As in evaluation
CONCLUSION: The teacher commends the students positively