Chp 7 ACG - CHAPTER 7 In Chapter 7 you are not responsible...

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CHAPTER 7 In Chapter 7, you are not responsible for Supplements A and B in the textbook (this material is on slides 35 - 37). Cost Principle for Inventory The cost of inventory should include all costs necessary to get the inventory in the location and condition necessary for its intended use. Inventory Definitions Merchandise inventory —items purchased from suppliers that are ready to be sold to customers without significant processing. ____________________________________________________ Manufactured inventory —items that the company manufactures into a product that will be sold to customers. Manufacturing costs —costs incurred in manufacturing the inventory item. Raw materials (direct materials )—items purchased that will be processed into the final manufactured inventory items. Direct labor —wages and fringe benefits of employees who work directly on the products being manufactured. Factory overhead —indirect manufacturing costs.
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Work in process inventory —products in the process of being manufactured, but the process in incomplete. Finished goods inventory —completed products that are ready for sale to customers (at this stage, these inventory items are the same as merchandise inventory). Cost of Goods Sold
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Chp 7 ACG - CHAPTER 7 In Chapter 7 you are not responsible...

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