Managerial Analysis Essay Example | Topics and Well Written Essays - 250 words

Managerial Analysis - Essay ExampleThe Factory Overhead account should be calculateed with 3000 dollars plot of ground the in the altogether material list account should be credited for the same amount. At the end of a significant period (for instance a month), the end balance in the overhead account (the be glue is recorded in the cost of goods sold and the ending inventory.)If the entries were not corrected, the balance sheet would be affected. Since they form part of the on-going assets, the current asset balances would have been overstated.Glue is part of indirect raw materials used in the production. That is, it is consumed in the whole process but does not make part of the last product. Raw materials of all types are originally entered into an inventory asset account with a credit to the tally accounts payment account and a debit to the raw materials inventory account (Ormiston & Fraser, 2013). During the consumption of the raw materials, the report treatment varies, depending on their status as indirect or direct raw materials. Glue is an indirect raw material as it does not form part of the final products, but it is consumed. Consequently, it is entered on the debit side of the factory overhead account while the raw materials inventory asset account is credited. At the conclusion of the month, the overhead ending balance will form part of the cost of goods sold and ending inventories. At the reporting period, the cost of unused production materials will form part of the raw materials inventory account and will be recorded on the balance sheet as a current asset.