6491365
Description
Mind Map by Katie Start, updated more than 1 year ago
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Created by Katie Start
about 8 years ago
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Chapter 4
- Types of inventory:
- Raw materials
- These are the materials that have been bought by a
manufacturing business and are ready to be transferred to the
production area where they will be used to make the finished
goods.
- These are the materials that have been bought by a
manufacturing business and are ready to be transferred to the
production area where they will be used to make the finished
goods.
- Work in progress
- This comprises part-finished products that are
awaiting completion.
- This comprises part-finished products that are
awaiting completion.
- Finished goods
- These are manufactured items that have
been completed and are ready for sale.
- These are manufactured items that have
been completed and are ready for sale.
- Raw materials
- Valuation methods:
- FIFO
- First in first out
- Inventory that is being issued is valued at the oldest purchase
price. This means that the inventory left in the stores is valued
at the most recent purchase price.
- Inventory that is being issued is valued at the oldest purchase
price. This means that the inventory left in the stores is valued
at the most recent purchase price.
- First in first out
- LIFO
- Last in first out
- Inventory that is being issued is valued at the
most recent purchase price. This means that the
inventory left in the stores is valued at the oldest
purchase price.
- Inventory that is being issued is valued at the
most recent purchase price. This means that the
inventory left in the stores is valued at the oldest
purchase price.
- Last in first out
- AVCO
- Average cost
- Inventory that is being issued is valued at an
average price. This means that the inventory left
in the stores is valued at the most recent
purchase price.
- Average cost = Total cost of goods in stores /
number of items in stores
- Average cost = Total cost of goods in stores /
number of items in stores
- Inventory that is being issued is valued at an
average price. This means that the inventory left
in the stores is valued at the most recent
purchase price.
- Average cost
- FIFO
- Manufacturing account
- Manufacturing account format:
- Opening inventory of raw materials.
- Purchases of raw materials.
- Closing inventory of raw materials.
- Direct materials used.
- Opening inventory of raw materials + Purchases of raw materials - Closing inventory of raw materials
- Opening inventory of raw materials + Purchases of raw materials - Closing inventory of raw materials
- Direct labour.
- Direct cost.
- Direct materials used + Direct labour
- Direct materials used + Direct labour
- Manufacturing overheads.
- Manufacturing cost.
- Direct cost + Manufacturing overheads
- Direct cost + Manufacturing overheads
- Opening inventory of work in progress.
- Closing inventory of work in progress.
- Cost of goods manufactured.
- Manufacturing cost + Opening inventory of work in progress - Closing inventory of work in progress
- Manufacturing cost + Opening inventory of work in progress - Closing inventory of work in progress
- Opening inventory of finished goods.
- Closing inventory of finished goods.
- Cost of goods sold.
- Cost of goods manufactured + Opening inventory of finished goods - Closing inventory of finished goods
- Cost of goods manufactured + Opening inventory of finished goods - Closing inventory of finished goods
- Opening inventory of raw materials.
- Manufacturing account format:
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