Chapter 7 Inventory

Chapter 7 Inventory - Chapter 7 Inventory 7.1 Inventory...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 7 Inventory 7.1 Inventory Components 7.2 Inventory Costing Methods A. Retail Business: inventory=merchandise for resale B. Manufacturing business : inventory 1. Raw Materials : items acquired by purchase (steel to cars) growth (grape to wine) or extraction (oil to gas) for processing into finished goods, but not yet used in the manufacturing process. 2. Work in Progress: raw materials already in manufacturing process +direct labour costs+manufacturing overhead Direct labour: earnings of all employees who work directly in the manufacturing process. Manufacturing overhead: all manufacturing costs than direct materials and labour. (electricity used in manufacturing process, manufacturing equipment inspection, product testing) 3. Finished Goods: items already manufactured (completed) Retail business: Purchase merchandise =inventory on balance sheet and Sell merchandise= COGS on income statement Manufacturing business: purchase raw materials raw materials decrease work in process
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/13/2011 for the course ADM 2340 taught by Professor Perper during the Fall '07 term at University of Ottawa.

Page1 / 3

Chapter 7 Inventory - Chapter 7 Inventory 7.1 Inventory...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online