Nivesh Sahayak App › Help › Accounts and final accounts

Manufacturing account

For a manufacturer the manufacturing account shows what it cost to make the goods: raw material used, factory expenses, change in work in progress, less by-products. It changes the presentation, not your net profit.

Step by step

1. Open it. Final accounts › More accounts: › Manufacturing account.
2. Choose the period.
3. Enter work in progress. Under Work in progress and factory costs type the half-made goods at cost on the opening and closing dates. Count them yourself; they are not in the stock register.
4. Tick factory expenses. Under Which expenses are factory costs? tick wages, factory power, fuel and the like.
5. Read the result. Raw material used, Prime cost, Cost of goods made, then Cost of goods sold and Gross profit.

Worked example

Opening stock of raw material	₹50,000
Add: purchases of raw material	₹3,00,000
Less: closing stock of raw material	₹70,000
Raw material used	₹2,80,000
Add: factory expenses (wages ₹60,000, power ₹25,000)	₹85,000
Prime cost	₹3,65,000
Add opening WIP ₹10,000, less closing WIP ₹15,000	−₹5,000
Less: by-products and scrap	₹2,000
Cost of goods made	₹3,58,000

Common mistakes and how to fix them

• Raw material shown as finished goods. An item counts as raw material when it is used in production or a bill of materials and never made. Record production entries.

Related help

All help for the App · Help for My data