Question

4. What is the difference between total manufacturing costs and cost of goods manufactured? Cost of goods manufactured and cost of goods sold? 5. Do you think a public company should be concerned with Corporate Social Responsibility? Why ohwhy not?

Answer 1

Answer:

4)

Difference between Total Manufacturing Cost and Cost of Goods Manufactured and cost of Goods Sold

The difference is the effect of the change in work in process during the period. The cost of goods manufactured schedule helps managers determine if the company is maintaining control over the costs of production.

In managerial accounting and cost accounting, the cost of goods manufactured is a schedule, statement, or calculation of the production costs for the products that were completed in an accounting period. In other words, the cost of goods manufactured is the manufacturing costs associated with the products that moved from the manufacturing area to the finished goods inventory during the period.

The formula for the cost of goods manufactured is the costs of: direct materials used + direct labor used + manufacturing overhead assigned = the manufacturing costs incurred in the current accounting period + beginning work-in-process inventory - ending work-in-process inventory.

The statement of cost of goods manufactured supports the cost of goods sold figure on the income statement. The two most important numbers on this statement are the total manufacturing cost and the cost of goods manufactured.

Total Manufacturing Cost includes the costs of all resources put into production during the period (meaning, the direct materials, direct labor and overhead applied). Cost of goods manufactured consists of the cost of all goods completed during the period. It includes total manufacturing costs plus the beginning work in process inventory minus the ending work in process inventory. Cost of goods sold are the costs of all goods Sold during the period and includes the cost of goods manufactured plus the beginning finished goods inventory minus the ending finished goods inventory. Cost of goods sold is reported as an expense on the income statements and is the only time product costs are expensed. This chart will summarize the formulas you will need:

Direct Materials Used:   Beginning Raw Materials Inventory + Raw Material Purchases – Ending Raw Materials Inventory – Indirect Materials Used

Total Manufacturing Cost:           Direct Materials + Direct Labor + Overhead applied

Cost of Goods Manufactured:    Total Manufacturing Cost (Direct Materials + Direct Labor + Overhead applied) + Beginning Work in Process Inventory – Ending Work in Process Inventory

Cost of Goods Sold:        Beginning Finished Goods Inventory + Cost of Goods Manufactured – Ending Finished Goods Inventory.

5) Corporate social Responsibility (CSR)

Yes, it is equally important to Public companies also. Public companies also needs to be concerned with CSR.

CSR program, or a sustainability strategy, should accomplish. “It comprises re-evaluating how the company thinks about its impact, engaging stakeholders beyond shareholders and coming up with a plan to improve the impact of the business on society and seize business opportunities and make cost savings as a result,” he attests. “This would involve a lot of planning and engagement with employees, managers, suppliers, NGOs, perhaps academics and others, to figure out where and how this is best done.”

The public sector has a number of distinct roles to play in the CSR agenda:

Endorsing and supporting the concept of CSR in enterprises

Adhering to good CSR practice in its own operations

Relevant regulatory roles

The public sector delivers many services in the community and environment and has various regulatory roles. These are part of their policy remit and separate to CSR activity. All public bodies exist to provide a service to the public or communities. They have a complexity and variety of functions, but all provide a service and are responsible to different sets of stakeholders. The very nature of public service reflects many principles of social responsibility – accountability, transparency and respect for differing stakeholder's interests.

The public sector also has a leadership role to ensure that its own way of operating is in line with good CSR practices in its multiplicity of roles as employer, purchaser, service provider, and in its engagement with communities.

The public sector also has various regulatory roles that are relevant to CSR. Many of the recommendations outlined in international CSR frameworks are already embedded in national legislation and policies and therefore are often not regarded as CSR activities by companies, given their legislative basis.   Examples include Employment and Equality Rights legislation, Company Law. Once legislative and regulatory frameworks are in place, the Government has the continuing role of monitoring their implementation, ensuring that breaches are dealt with properly, and offering opportunities for redress for those who are impacted when the statutory requirements are not complied with.

In the National Plan on CSR the Government has articulated its policy direction and support for CSR. Through the representation of relevant public bodies on the CSR Stakeholder Forum the State is helping to raise the profile of CSR in the public sector as well as encouraging its proliferation across all industry, irrespective of size and sector.

Public sector Enterprises (PSEs) plays a crucial role in development of the nation’s economy. Central Government and State government set up PSEs to build the industrial capacity and generating employment along with improving socio-economic condition.

Every year, each PSE shall with the approval of its Board of Directors makes a budgetary allocation for CSR and Sustainability activities / projects for the year. The budgetary allocation will be based on the profitability of the company.

CONCLUSION:

As explained above public company also should be concerned with CSR.