Final answer:
The sections of the schedule of cost of goods manufactured are direct labor, direct materials, and factory overhead. These sections detail the direct costs associated with the production of goods. Cost of goods manufactured, cost of goods sold, and net income, while related to product costing, serve different roles in financial statements.
Step-by-step explanation:
The schedule of cost of goods manufactured includes three main sections: direct labor, direct materials, and factory overhead. These are the costs directly tied to the production of goods. Here's how they contribute to the schedule:
- Direct materials are the raw materials that become part of the finished product.
- Direct labor involves the workforce directly involved in assembling or creating the product.
- Factory overhead encompasses all other costs incurred within the factory that cannot be directly tied to specific units of product, including utilities, depreciation on factory equipment, and salaries for factory supervisors.
Cost of goods manufactured represents the total cost of making and finishing products during the period, which is determined using the three aforementioned sections. Cost of goods sold is a section of the income statement that relates to the direct costs attributable to the goods sold by a company. Net income is the total profit of a company after all expenses have been deducted from revenue and is not a part of the schedule of cost of goods manufactured. Instead, it's derived from subtracting all expenses, including cost of goods sold, from the revenue.