{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chp 8 Inventories(1)

Chp 8 Inventories(1) - Inventories Measurement Anthony...

Info icon This preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
Inventories: Measurement Anthony Meder, Ph.D. October 25 and 27, 2011
Image of page 1

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

View Full Document Right Arrow Icon
Types of Inventory Wholesale or retail firms? Goods in finished form for resale. Manufacturing firms? Start with Raw materials Direct labor Manufacturing overhead Those flow into Work-in-process (items being manufactured) Then, into Finished Goods (W-i-P that has
Image of page 2
Manufacturing Inventories (illustration from the author provided slides) Raw Materials Work in Process Finished Goods Cost of Goods Sold Direct Labor Manufacturing Overhead $XX $XX $XX Raw materials purchased Direct labor incurred Manufacturing overhead incurred Raw materials used Direct labor applied Manufacturing overhead applied Work in process transferred to finished goods Finished goods sold
Image of page 3

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

View Full Document Right Arrow Icon
Perpetual Inventory System The one we have used to this point Tracks inventory and COGS as sales are made Allows firms to track inventory from acquisition to sale. If accurate, managers know at any given time how much inventory is on hand without a physical count
Image of page 4
Periodic Inventory System A physical count is needed at the end of the year to calculate COGS. During the year, merch. purchases go into a Purchases account Purchases 600 Accts. Payable 600 BEG INV + PURCHASES – COGS = END INV. BEG INV + PURCHASES – END INV = COGS
Image of page 5

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

View Full Document Right Arrow Icon
What is included in inventory? Obviously, items in possession of the firm are inventory Goods in transit F.O.B. shipping means once the seller ships, the buyer has legal title and responsibility F.O.B. destination means buyer doesn’t have
Image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern