Lenape Regional High School District – BOE Approved 2/15/12
Accounting 3
2012-2013
[Pat Costello, pcostello@lrhsd.org, Seneca High School, 609-268-4600 X8392]
[Mike Smith, msmith@lrhsd.org, Lenape High School, 609-654-5111 X8958]
[Rick Bozarth, rbozarth@lrhsd.org, Shawnee High School, 609-654-7544 X8344]
[Jack Lamplugh, jlamplugh@lrhsd.org, Cherokee High School 856-983-5140 X8609]
Unit #8 Cost Accounting for a Manufacturing Business
Stage 1 – Desired Results
Established Goals
2009 NJCCC Standard(s), Strand(s)/CPI #
(https://www13.state.nj.us/NJCCCS/)
Common Core Curriculum Standards for Math and English
(http://www.corestandards.org/)
Standard 8.1 Educational Technology: All students will use digital tools
to access, manage, evaluate, and synthesize information in order to solve
problems individually and collaboratively and to create and communicate
knowledge.
st
21 Century Themes
( www.21stcenturyskills.org )
_x_ Global Awareness
_x_ Financial, Economic, Business and Entrepreneurial Literacy
___Civic Literacy
___Health Literacy
___Environmental Literacy
st
21 Century Skills
Strand A. Technology Operations and Concepts
Strand D. Digital Citizenship
Learning and Innovation Skills:
_x__Creativity and Innovation
_x__Critical Thinking and Problem Solving
_x__Communication and Collaboration
Standard 9.1 21st-Century Life and Career Skills: All students will
demonstrate the creative, critical thinking, collaboration, and problemsolving skills needed to function successfully as both global citizens and
workers in diverse ethnic and organizational cultures.
Information, Media and Technology Skills:
_x_Information Literacy
___Media Literacy
_x__ICT (Information, Communications and Technology) Literacy
Strand A. Critical Thinking and Problem Solving
Strand B. Creativity and Innovation
Strand C. Collaboration, Teamwork, and Communication
Strand E. Communication and Media Fluency
Strand F. Accountability, Productivity, and Ethics
Life and Career Skills:
_x__Flexibility and Adaptability
_x__Initiative and Self-Direction
_x__Social and Cross-Cultural Skills
_x__Productivity and Accountability
_x__Leadership and Responsibility
LRHSD (2011) Adapted from ASCD © 2004
Lenape Regional High School District – BOE Approved 2/15/12
Standard 9.2 Personal Financial Literacy: All students will develop skills
and strategies that promote personal and financial responsibility related to
financial planning, savings, investment, and charitable giving in the global
economy.
Strand A. Income and Careers
Strand B. Money Management
Strand C. Credit and Debit Management
Strand F. Civic Financial Responsibility
Standard 9.3 Career Awareness, Exploration, and Preparation: All
students will apply knowledge about and engage in the process of career
awareness, exploration, and preparation in order to navigate the globally
competitive work environment of the information age.
Strand C. Career Preparation
Standard 9.4 Career and Technical Education: All students who
complete a career and technical education program will acquire academic
and technical skills for careers in emerging and established professions
that lead to technical skill proficiency, credentials, certificates, licenses,
and/or degrees.
Strand A. Cumulative progress indicators for foundational knowledge and
skills
Strand B. Cumulative progress that are specific to the career cluster
Enduring Understandings:
Students will understand that...
Essential Questions:
EU 1
EU 1
A manufacturing business differs from a merchandising business.
EU 2
A manufacturing business combines raw material, direct labor and
Why do the year-end accounting activities of a manufacturing
business differ from those of a merchandising business?
Why does a manufacturing business use a number of forms to
keep detailed information?
LRHSD (2011) Adapted from ASCD © 2004
Lenape Regional High School District – BOE Approved 2/15/12
overhead to determine the manufacturing cost.
EU 2
How does a company determine what price to charge for a manufactured
item?
Knowledge:
Students will know…
Skills:
Students will be able to…
EU 1
EU 1
Identify the elements of manufacturing costs
Vocabulary and accounting concepts for a manufacturing business
Financial statements are different for a manufacturing business.
The inventory accounts used for a manufacturing business.
EU 2
Types of factory overhead costs.
How to analyze ledgers and cost sheets.
How costs flow through the manufacturing process
EU 2
Prepare ledgers and cost sheets for a manufacturing business
Journalize transactions for a manufacturing business
Prepare financial statements for a manufacturing business
Calculate and apply factory overhead
Stage 2 – Assessment Evidence
Recommended Performance Tasks: Each unit must have at least 1 Performance Task. Consider the GRASPS form.
You are the inventory accountant for Kingston Corporation, a manufacturing company, using the perpetual inventory method for all inventory accounts.
Direct materials, direct labor, and applied overhead are recorded on cost sheets. At the end of each month, general journal entries are made to update
the general ledger manufacturing accounts. Over-applied or under-applied overhead is closed to Income Summary and reported on the income
statement as an adjustment to the costs of goods sold.
An internal auditor suggests to the CFO, the company could save time if a number of accounting changes are made:
1. use the periodic inventory method 2. Drop the used of applied overhead, and 3. Close all manufacturing accounts to income summary similar to
the procedure used by merchandising businesses.
The CFO has asked you to consider each of the auditor’s recommendations and prepare a report in support or opposition. The CFO is concerned with
how these new procedures would provide adequate information to record raw material, direct labor, direct overhead to prepare the Income Statement.
He also wants you to consider any cost or time saving aspects to the new procedures.
Other Recommended Evidence: Tests, Quizzes, Prompts, Self-assessment, Observations, Dialogues, etc.
Answer unit questions
Define vocabulary terms
1. applied overhead: the estimated amount of factory overhead recorded on cost sheets
LRHSD (2011) Adapted from ASCD © 2004
Lenape Regional High School District – BOE Approved 2/15/12
2. cost ledger: a ledger containing all cost sheets for products in the process of being manufactured
3. direct labor: salaries of factory workers who make a product
4. direct materials: materials that are of significant value in the cost of a finished product and that become an identifiable part of the product
5. factory overhead: all expenses other than direct materials and direct labor that apply to making products
6. finished goods: manufactured products that are fully completed
7. finished goods ledger: a ledger containing records of all finished goods on hand
8. indirect labor: salaries paid to factory workers who are not actually making products
9. indirect materials: materials used in the completion of a product that are of insignificant value to justify accounting for separately
10. materials ledger: a ledger containing all records of materials
11. work in process: products that are being manufactured but are not yet complete
12. overapplied overhead: the amount by which applied factory overhead is more than actual factory overhead
13. statement of cost of goods manufactured: a statement showing details about the cost of finished goods
14. underapplied overhead: the amount by which applied factory overhead is less than actual factory overhead
Accounting concepts concerning cost accounting
Completion of accounting problems
Test and quizzes on unit content
Practice Set/Reinforcement Activity
LRHSD (2011) Adapted from ASCD © 2004
Lenape Regional High School District – BOE Approved 2/15/12
Stage 3 – Learning Plan
Suggested Learning Activities to Include Differentiated Instruction and Interdisciplinary Connections: Consider the WHERETO elements.
Each learning activity listed must be accompanied by a learning goal of A=Acquiring basic knowledge and skills, M=Making meaning and/or a
T=Transfer.
In this unit on Cost Accounting for a Manufacturing Business, you are to introduce the Enduring Understanding and essential questions and the
students need to know that how a manufacturing business combines raw material, direct labor and manufacturing overhead to determine what the cost
is to manufacture an item.
Define terms and concepts and classify new accounts for cost accounting (A)
Record materials ordered, received, and issued in Materials Ledger (A)
Record direct materials and direct labor for a job on a Cost Sheet (A)
Calculate and record factory overhead using the different methods (A)
Complete a Cost Sheet (A)
Record goods manufactured or shipped in the Finished Goods Ledger (A)
Identify and classify new accounts (A)
Complete financial statements needed for a manufacturing business (A)
Take a graded assignment and explain where you made a mistake(s) and what you would do to fix it. (M)
Prepare manufacturing journal entries (A, M)
Prepare statement of cost of goods manufactures, income statement, and balance sheet entries (A, M)
Determine total cost and unit cost for a job and determining total cost for a finished item (A, M)
Use “T” accounts to analyze then journalize manufacturing accounting transactions (A, M)
Explain which tasks could be automated. (T)
Classify manufacturing costs; specifying the ledger used of initial recording (A, M, T)
Explain what over applied or under applied factory overhead does to the cost per unit of an item. (M, T)
Complete a material ledger card ( M, T)
Calculate factory overhead applied rate ( M, T)
Prepare a cost sheet for a specific company ( M, T)
Record entries in a finished goods ledger ( M, T)
Prepare cost records for a specific company ( M, T)
Journalize cost accounting transaction for a manufacturing company ( M, T)
Journalize and post entries that summarize cost records at the end of a fiscal period ( M, T)
Prepare a statement of cost of goods manufactured for a specific company ( M, T)
Ensure that there are ongoing cycles of model, practice, feedback, and adjustment built into the unit.
TAILORING FOR DIVERSE LEARNERS
LRHSD (2011) Adapted from ASCD © 2004
Lenape Regional High School District – BOE Approved 2/15/12
Assess prior knowledge and skills through differentiated activities to accommodate different knowledge and skills levels.
Provide students with open-ended questions, activities, assignments, and assessments that enable students to give different but equally valid
responses.
Appeal to various modalities (e.g., present information orally, visually, and in writing).
Accommodate students with different learning styles by providing opportunities for them to work alone and in groups.
All students choices of products (e.g., visual, written, oral) for activities and assignments.
Provide students with options for demonstrating understanding through various products and performances without compromising the goals or
standards.
LRHSD (2011) Adapted from ASCD © 2004