If there is no product at the end of the production cost period, there is no balance in the production cost account at the end of the period.

2. In a balanced situation:

At the end of production cost, there is a work in process, and at the end of production cost, there is a debit balance, which indicates the cost of work in process.

The explanation is as follows:

If there is no product at the end of the period, the production cost of a product collected by the "production cost" subject is the production cost of finished products in this period.

As far as the products in process at the end of the period are concerned, there are both finished products and products in process at the end of the period.

It is necessary to allocate the production cost of a product collected in this period between the finished product and the final product.

The calculation formula is as follows:

Opening WIP cost+current production cost = current finished product cost+final WIP profit and loss.

Extended data:

Production cost, also known as manufacturing cost, refers to the cost of production activities, that is, the expenses incurred by enterprises in producing products.

Production cost is the monetary expression of the utilization rate of various resources in the production process, and it is an important index to measure the technical and management level of enterprises.

Including direct costs and manufacturing costs.

Direct costs include direct materials (raw materials, auxiliary materials, spare parts, fuel and power, etc. ), direct wages (wages and subsidies for production personnel) and other direct expenses (such as welfare expenses);

Manufacturing expenses refer to the expenses incurred by branches and workshops in an enterprise for organizing and managing production, including salaries, depreciation expenses, maintenance expenses, repair expenses and other manufacturing expenses (office expenses, travel expenses, labor insurance expenses, etc.). ).

References:

Production cost-Baidu Encyclopedia