A separate cost of production report is prepared for each processing department. The cost of ending inventory in a Process Costing system is equal to the sum of all costs for units transferred out plus labor and factory overhead costs, less any mate... Read more
Taking the average product cost over a time period has a smoothing effect that prevents COGS from being highly impacted by the extreme costs of one or more acquisitions or purchases. LIFO is where the latest goods added to the inventory are sold fir... Read more
The ending WIP, on the other hand, comprises the remaining manufacturing costs after deducting the value of goods finished within the period. The cost of goods manufactured is an important KPI to track for a number of reasons. It’s not just a... Read more
A consignment shop can sell a variety of products or specialize in selling a particular product. For example, a consignment shop may be focused on selling a variety of second-hand goods or selling only second-hand clothing. Store 'profit' is far fro... Read more
For example, if a project promises two different rates of return and managers are uncertain about which one of them might prevail, they would lose their confidence to go ahead with the proposal. Capital budgeting refers to the method that is used fo... Read more
Similarly, he is also not responsible for any loss incurred by the consignment business. The consignor only records the sale when the consignee sells the goods to a 3rd party. As mentioned, the consignor must use two double entries to record the tra... Read more
How will this entry be posted in the ledger accounts? The $30,000 will be posted to the credit side of the Common Stock account. The closing balance of cash is $19,200, the closing balance of office supplies is $3,400 and the closing balance of acco... Read more
When sales are recorded using the FIFO method, the oldest inventory–that was acquired first–is used up first. FIFO leaves the newer, more expensive inventory in a rising-price environment, on the balance sheet. As a result, FIFO can increase net in... Read more
Some systems also include a hidden flag to make certain files invisible; this flag is used by the computer system to hide essential system files that users should not alter. Many computer systems use extensions in file names to help identify what th... Read more
When your goods for sale are distinct, like fine art, antiques or hand-tailored suits, the specific identification method for valuing inventory costs may be effective. Companies have a choice of inventory valuation methods under generally accepted a... Read more
