Comparing the accounting treatment of material and labor costs for manufacturing versus Service Company.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 11, Problem 1LO

To determine

Comparing the accounting treatment of material and labor costs for manufacturing versus Service Company.

Expert Solution & Answer

Explanation of Solution

Comparing the accounting treatment of material and labor costs for manufacturing versus Service Company is as follows:

In a manufacturing company, the expenses are allotted over the units of goods manufactured, whereas in a service company, the expenses are assimilated based on the movement. For a manufacturing unit, absorption costing can be utilized, whereas in a service company, activity based costing or job costing can be utilized to account the material and labor costs.

In manufacturing companies, numerous service companies buy raw materials and change them through various production phases like, work in process, finished goods, and cost of goods sold. Generally, services cannot be warehoused and sold in future. Service companies don't have work in process and finished goods inventory accounts for collecting costs before exchanging them to a cost of goods sold account.

Since wholesale and retail organizations have extensive inventories, it might appear to be unusual to consider them as a service company. Despite the fact that service companies don't accumulate costs in inventory accounts for financial reporting uses, they do collect cost data for decision making.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 2

Question

Chapter 11, Problem 1LO

To determine

Comparing the accounting treatment of material and labor costs for manufacturing versus Service Company.

Expert Solution & Answer

Explanation of Solution

Comparing the accounting treatment of material and labor costs for manufacturing versus Service Company is as follows:

In a manufacturing company, the expenses are allotted over the units of goods manufactured, whereas in a service company, the expenses are assimilated based on the movement. For a manufacturing unit, absorption costing can be utilized, whereas in a service company, activity based costing or job costing can be utilized to account the material and labor costs.

In manufacturing companies, numerous service companies buy raw materials and change them through various production phases like, work in process, finished goods, and cost of goods sold. Generally, services cannot be warehoused and sold in future. Service companies don't have work in process and finished goods inventory accounts for collecting costs before exchanging them to a cost of goods sold account.

Since wholesale and retail organizations have extensive inventories, it might appear to be unusual to consider them as a service company. Despite the fact that service companies don't accumulate costs in inventory accounts for financial reporting uses, they do collect cost data for decision making.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 11, Problem 1LO

To determine

Comparing the accounting treatment of material and labor costs for manufacturing versus Service Company.

Expert Solution & Answer

Explanation of Solution

Comparing the accounting treatment of material and labor costs for manufacturing versus Service Company is as follows:

In a manufacturing company, the expenses are allotted over the units of goods manufactured, whereas in a service company, the expenses are assimilated based on the movement. For a manufacturing unit, absorption costing can be utilized, whereas in a service company, activity based costing or job costing can be utilized to account the material and labor costs.

In manufacturing companies, numerous service companies buy raw materials and change them through various production phases like, work in process, finished goods, and cost of goods sold. Generally, services cannot be warehoused and sold in future. Service companies don't have work in process and finished goods inventory accounts for collecting costs before exchanging them to a cost of goods sold account.

Since wholesale and retail organizations have extensive inventories, it might appear to be unusual to consider them as a service company. Despite the fact that service companies don't accumulate costs in inventory accounts for financial reporting uses, they do collect cost data for decision making.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 11, Problem 1LO

To determine

Comparing the accounting treatment of material and labor costs for manufacturing versus Service Company.

Expert Solution & Answer

Explanation of Solution

Comparing the accounting treatment of material and labor costs for manufacturing versus Service Company is as follows:

In a manufacturing company, the expenses are allotted over the units of goods manufactured, whereas in a service company, the expenses are assimilated based on the movement. For a manufacturing unit, absorption costing can be utilized, whereas in a service company, activity based costing or job costing can be utilized to account the material and labor costs.

In manufacturing companies, numerous service companies buy raw materials and change them through various production phases like, work in process, finished goods, and cost of goods sold. Generally, services cannot be warehoused and sold in future. Service companies don't have work in process and finished goods inventory accounts for collecting costs before exchanging them to a cost of goods sold account.

Since wholesale and retail organizations have extensive inventories, it might appear to be unusual to consider them as a service company. Despite the fact that service companies don't accumulate costs in inventory accounts for financial reporting uses, they do collect cost data for decision making.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 11, Problem 1LO

To determine

Comparing the accounting treatment of material and labor costs for manufacturing versus Service Company.

Expert Solution & Answer

Explanation of Solution

Comparing the accounting treatment of material and labor costs for manufacturing versus Service Company is as follows:

In a manufacturing company, the expenses are allotted over the units of goods manufactured, whereas in a service company, the expenses are assimilated based on the movement. For a manufacturing unit, absorption costing can be utilized, whereas in a service company, activity based costing or job costing can be utilized to account the material and labor costs.

In manufacturing companies, numerous service companies buy raw materials and change them through various production phases like, work in process, finished goods, and cost of goods sold. Generally, services cannot be warehoused and sold in future. Service companies don't have work in process and finished goods inventory accounts for collecting costs before exchanging them to a cost of goods sold account.

Since wholesale and retail organizations have extensive inventories, it might appear to be unusual to consider them as a service company. Despite the fact that service companies don't accumulate costs in inventory accounts for financial reporting uses, they do collect cost data for decision making.

Answer 6

Chapter 11, Problem 1LO

To determine

Comparing the accounting treatment of material and labor costs for manufacturing versus Service Company.

Expert Solution & Answer

Explanation of Solution

Comparing the accounting treatment of material and labor costs for manufacturing versus Service Company is as follows:

In a manufacturing company, the expenses are allotted over the units of goods manufactured, whereas in a service company, the expenses are assimilated based on the movement. For a manufacturing unit, absorption costing can be utilized, whereas in a service company, activity based costing or job costing can be utilized to account the material and labor costs.

In manufacturing companies, numerous service companies buy raw materials and change them through various production phases like, work in process, finished goods, and cost of goods sold. Generally, services cannot be warehoused and sold in future. Service companies don't have work in process and finished goods inventory accounts for collecting costs before exchanging them to a cost of goods sold account.

Since wholesale and retail organizations have extensive inventories, it might appear to be unusual to consider them as a service company. Despite the fact that service companies don't accumulate costs in inventory accounts for financial reporting uses, they do collect cost data for decision making.

Answer 7

Chapter 11, Problem 1LO

To determine

Comparing the accounting treatment of material and labor costs for manufacturing versus Service Company.

Answer 8

Expert Solution & Answer

Explanation of Solution

Comparing the accounting treatment of material and labor costs for manufacturing versus Service Company is as follows:

In a manufacturing company, the expenses are allotted over the units of goods manufactured, whereas in a service company, the expenses are assimilated based on the movement. For a manufacturing unit, absorption costing can be utilized, whereas in a service company, activity based costing or job costing can be utilized to account the material and labor costs.

In manufacturing companies, numerous service companies buy raw materials and change them through various production phases like, work in process, finished goods, and cost of goods sold. Generally, services cannot be warehoused and sold in future. Service companies don't have work in process and finished goods inventory accounts for collecting costs before exchanging them to a cost of goods sold account.

Since wholesale and retail organizations have extensive inventories, it might appear to be unusual to consider them as a service company. Despite the fact that service companies don't accumulate costs in inventory accounts for financial reporting uses, they do collect cost data for decision making.