UNIT 16 study guide

UNIT 16 study guide - 4) Role of FINISHED GOODS INVENTORY...

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UNIT 16 1) Periodic inventory system- system actually records transfers in and transfers out, and uses ending inventory as a check figure (internal control) Perpetual inventory system- system records transfers in (OR transfers out), but not both (usually because the nature of the business prevents recording both). Inventory is physically counted at beginning and ending of the period, and the formula BB+TI=TO+EB is used to calculate the missing term. 2) Purchases - of materials to create goods Cost of goods manufactured - Comes from completion of work in the factory Cost of Goods Manufactured is the Transfers Out of WIP, and Transfers In to FG 3) - Purchase of raw materials inventory RAW MATERIALS INVENTORY - Direct materials, direct labor, manufacturing overheads WORK IN PROGRESS INVENTORY - Cost of goods manufactured FINISHED GOODS INVENTORY - Cost of goods sold
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Unformatted text preview: 4) Role of FINISHED GOODS INVENTORY Cost of Goods Manufactured Comes from completion of work in the factory Cost of Goods Manufactured is the Transfers Out of WIP, and Transfers In to FG WORK-IN-PROCESS INVENTORY The balance at the end of any period consists of work that is in progress in the factory. Transfers in to WIP: Direct Materials, Direct Labor, Manufacturing Overheads Direct Labor Traceable labor costs used to manufacture the product Manufacturing Overheads All other costs required to manufacture the product except D/M and D/L Direct Materials Direct materials are the raw materials moved into production Direct materials come from the Raw Materials Inventory RAW MATERIALS INVENTORY Transfers in are purchases of raw materials Transfers out are the raw materials moved into production (direct materials)...
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UNIT 16 study guide - 4) Role of FINISHED GOODS INVENTORY...

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