A manufacturing account is drawn up by

A manufacturing account is drawn up by firms which make and sell articles. The manufacturing account is an intermediate account that shows the cost of goods manufactured during a given period. It includes direct materials used, direct labor, and manufacturing overheads. The manufacturing account also shows the value of finished goods produced during the period. The manufacturing account is an important tool for manufacturing firms to determine the cost of their production and the value of their inventory. The manufacturing account is not used by firms providing personal services, firms engaged solely in buying and selling of goods, or non-trading organizations.