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MANUFACTURING: PRODUCTION COST STATEMENT25 JULY 2013Lesson Description In this lesson we: Prepare a production cost statement Prepare the notes to the production cost statement Understand the concept

How to fill out manufacturing production cost statement

How to fill out manufacturing production cost statement

1. To fill out a manufacturing production cost statement, follow these steps:
2. Identify the direct costs of production, such as raw materials, labor, and manufacturing overhead.
3. Determine the quantity of each direct cost element used in the production process.
4. Calculate the total cost of each direct cost element by multiplying the quantity used by the unit cost.
5. Sum up all the direct costs to obtain the total production cost.
6. Identify the indirect costs, including factory rent, utilities, depreciation, etc.
7. Allocate the indirect costs to the production units based on a suitable allocation basis, such as machine hours or direct labor hours.
8. Calculate the overhead rate by dividing the total indirect costs by the total production units.
9. Calculate the indirect cost allocated to each unit of production by multiplying the overhead rate by the number of units produced.
10. Add the indirect cost to the total production cost.
11. Review and verify the accuracy of all calculations.
12. Prepare the manufacturing production cost statement, including a detailed breakdown of direct and indirect costs.
13. Present the statement to relevant stakeholders or use it for internal management purposes.

Who needs manufacturing production cost statement?

1. Manufacturing companies and businesses require a manufacturing production cost statement.
2. This statement is useful for:
3. - Business owners and management to understand and analyze the cost of production.
4. - Investors and creditors to assess the financial performance and viability of the company.
5. - Tax authorities to determine tax liabilities and compliance with regulations.
6. - Auditors to verify the accuracy of financial statements.
7. - Other stakeholders, such as suppliers, customers, or consultants, who need to evaluate the cost structure and competitiveness of the company.

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What is manufacturing production cost statement?

The manufacturing production cost statement is a financial document that outlines the cost of producing goods or services.

Who is required to file manufacturing production cost statement?

Manufacturers and companies involved in production activities are required to file manufacturing production cost statement.

How to fill out manufacturing production cost statement?

To fill out a manufacturing production cost statement, the company must gather information on direct and indirect costs associated with production.

What is the purpose of manufacturing production cost statement?

The purpose of manufacturing production cost statement is to analyze and evaluate the cost of production to make informed business decisions.

What information must be reported on manufacturing production cost statement?

Information such as raw material costs, labor costs, overhead expenses, and total production costs must be reported on manufacturing production cost statement.