Question

what is manufactering account​

Answer 1

manufacturing is an account in the general ledger which is used to accumulate all the manufacturing costs of goods completed by a business during an accounting period. For a manufacturing business the manufacturing account needs to be prepared before completing the trading and profit and loss accounts

Answer 2

ANSWER :

Manufacturing Account is an account which is prepared to ascertain the cost of the goods produced or manufactured.

• ➪ The organisation which are engaged in the activities of manufacturing/production of any product, prepare Manufacturing Account in addition to Trading Account as a part of their Final Accounts.

• ➪ Manufacturing Account is debited with the amount of Opening Stock of Raw Materials, Work in Progress, Puchase of Raw Materials and the Expenses relating to conversion of Raw Materials into Finished Product, i.e., Expenses incurred in the factory.

• ➪ Manufacturing Account is credited with Closing Stock of Raw Materials and Work in Progress.

• ➪ The difference between the total of debit side and credit side of the Manufacturing Account represents the cost of goods manufactured and this amount will be transferred to the Trading Account.

• ➪ Although the Manufacturing Account is prepared to ascertain the cost of goods produced/manufactured, the manufacturer can also ascertain the Profit or Loss on manufacture, by comparing the market price of such products of other manufacturers.

• ➪ Preparation of the Manufacturing Account helps the manufacturer to ascertain whether it would be more profitable to manufacture the articles or whether he should buy the same from outside.