Tuesday, December 28, 2010
Controlling and Costing Materials:Part 1
JOIN KHALID AZIZ
ICMAP STAGE 1,2,3,4
CA MODULE B & D
Effective materials management is essential in order to (1) provide the best service to customers, (2) produce at maximum efficiency, and (3) manage inventories at predetermined levels to stabilize investments in inventories.
Successful materials management requires the development of a highly integrated and coordinated system involving sales forecasting, purchasing, receiving, storage, production, shipping, and actual sales. Both the theory of costing materials and inventories and the practical mechanics of cost calculations and record keeping must be considered.
Costing materials present some important, often complex, and sometime highly controversial questions concerning the costing of materials used in production and -he cost of inventory remaining to be consumed in a future period. In financial accounting, the subject is usually presented as a problem of inventory valuation; in cost accounting, the primary problem is the determination of the cost of various materials consumed in production and a proper charge to cost of goods sold.
Procedures for Materials Procurement and Use:
Although production processes and materials requirements vary, the cycle of procurement and use of materials usually involves the following steps:
Engineering and planning determine the design of the product, the materials specifications, and the requirements at each stage of operations. Engineering and planning not only determine the maximum and minimum quantities to run and the bill of materials for given products and quantities but also cooperate in developing standards where applicable.
The production budget provides the master plan from which details concerning materials requirements are eventually developed.
The purchase requisition informs the purchasing agent concerning the quantity and type of materials needed.
The purchase order contracts for appropriate quantities to be delivered at specified dates to assure uninterrupted operations.
The receiving report certifies quantities received and may report results of inspection and testing for quality.
The materials requisition notifies the storeroom or warehouse to deliver specified time or is the authorization for the storeroom to issue material to departments.
The materials ledger cards record the receipt and the issuance of each class of materials and provide a perpetual inventory record.
Accounting procedures for materials procurement and use involve forms and records necessary for general ledger financial accounting as well as those necessary for costing a job, process or department, and for maintaining perpetual inventories and other statistical summaries. The purchase requisition, purchase order, receiving report, materials requisition, bill of materials, scrap report, returned materials report, materials ledger cards, and summary of materials used are some of the forms used for materials control under a cost system. The purchases journal, the cash payments journal, the general journal, and the general ledger control accounts are also used.
The discussion here is not based on any particular type or size of industry. It is, rather a general description of the accounting and controlling procedure involved in the procurement and use of materials. To understand the detailed procedure of purchasing, receiving stocking, and using materials
First-in-First-Out (FIFO) Costing Method
Average Costing Method
Last-in-First-Out (LIFO) Costing Method
Other Methods-Month end average cost, last purchase price or market price at date of issue, and standard cost.
FRESH CLASSES OF
ICMAP STAGE 1,2,3,4
CA MODULE B & D
ACCA & CAT
CRASH CLASSES OF B.COM IN JUST 20 DAYS
ACCOUNTING OF ICMAP 1,2,3,4
ACCOUNTING O/A LEVEL
B.COM & M.COM
MICRO ECONOMICS & STATISTICS OF MA-ECONOMICS
EDUCATION IS OUR NATION'S SWORD
- #KARACHI #MONSOON (1)
- 7 key skills of a project manager (1)
- ACCOUNTING (39)
- ACCOUNTING AND AUDIT SERVICES AVAILABLE (1)
- ACCOUNTING AND MARKETING SERVICES (1)
- Accounting for Bills of Exchange (1)
- Accounting scandals (1)
- ad (3)
- Advertisement (7)
- AMALGAMATION PRACTICE EXERCISES (1)
- B.COM (12)
- B.COM REGULAR 2011 EXAMS (1)
- BILA UNWAN 29/09/2013 بلا عنوان (1)
- BILA UNWAN 30/09/2013 بلا عنوان (1)
- Branch Accounting (1)
- Budget (1)
- Budget 2012-13 (1)
- Budget 2013-14 pakistan (1)
- BUDGET 2014-15 (1)
- BUDGET 2014-15 SALIENT FEATURES (1)
- Business SWOT Analysis - Threats is an Opportunity (1)
- Capital Budgeting (1)
- CERTIFICATE HOLDERS (1)
- COACHING CLASSES FOR B.COM (1)
- COACHING CLASSES FOR COMMERCE STUDENTS (3)
- COACHING CLASSES FOR COMMERCE STUDENTS: (2)
- COACHING CLASSES FOR FIA-ACCA STUDENTS IN KARACHI (1)
- Commerce (1)
- COST ACCOUNTING (11)
- Cricket (1)
- Decentralization (1)
- Dividend (1)
- Economics (26)
- EDUCATION (3)
- EID MUBARAK (1)
- ENRON Scandal Summary (1)
- Entertainment (2)
- Evolution of Tax Culture in Pakistan (1)
- EXEMPTIONS AWARDED BY ICAP TO VARIOUS DEGREE (1)
- fia acca (1)
- Finance (1)
- FOOD STREETS OF KARACHI: HUSSAINABAD AND AYESHA MANZIL (1)
- FREELANCE AUDIT (1)
- GOLDEN OPPORTUNITY TO MARKET YOUR BUSINESS (1)
- HISTORY (1)
- HOLDING COMPANIES (1)
- I.COM AND O/A LEVEL (1)
- icmap (1)
- Investment (1)
- Investment Decision (1)
- IQRA EDUCATION NETWORK AND CONSULTANTS: (1)
- JAVED CHOUDRY (1)
- javed chowdry on burma muslim killings (1)
- Joint Products and Joint Product Cost (1)
- KARACHI UNIVERSITY (1)
- KARACHI UNIVERSITY DATE SHEET (1)
- Khula is not regarded as a talaaq even if the word talaaq is used (1)
- MA ECONOMICS (7)
- management (3)
- Management Accounting (14)
- Marital Issues-khula (2)
- Maslow's Theory of Motivation - Hierarchy of Needs (1)
- Methods of Costing By-Products: (1)
- Movies (1)
- NEW YEAR (1)
- O/A LEVELS (1)
- PARTNERSHIP ACCOUNTS PIECEMEAL DISTRIBUTION (1)
- Politics (3)
- Post Keynesian Economics (1)
- Result (2)
- REVOLUTIONIZING RAMADAN (1)
- RISK ANALYSIS TECHNIQUES (1)
- Segment Reporting and Transfer Pricing: PART 1 (1)
- Sports (1)
- Steps to the Accounting Cycle (1)
- Stock Exchange (1)
- SYLLABUS (2)
- TIME TABLE (1)
- TIMINGS AND VENUES OF EID PRAYERS IN KARACHI (1)
- Top Story (1)
- TOPI DRAMA (1)
- TQM (1)
- Transfer pricing (1)
- Types and Classification of Bill of Exchange (1)
- UNOFFICIAL DATE SHEET B.COM KARACHI UNIVERSITY EXAMS 2011 (1)
- vat (1)
- What is a Term Finance Certificate (TFC) (1)
Accounts receivable, inventory, and total quality management
B.COM PART 1 AND 2 COACHING CLASSES FOR SUPPLEMENTARY EXAMS. HOME AND COACHING. ACCOUNTING, STATISTICS AND ECONOMICS OF PART 1. ADVANCED...
University Of Karachi M.A. (Previous) and M.A. (Final) Examination IN ECONOMICS SCHEME OF STUDIES M.A. (Previous) 1. The examination for deg...
MA-ECONOMICS PRIVATE KARACHI UNIVERSITY,REGISTRATION DATE EXTENDED.
B.COM 1 & 2 ACCOUNTING, STATISTICS, ECONOMICS, ADVANCED ACCOUNTING, INCOME TAX LAW JOIN SIR KHALID 0322-3385752 R-1173,AL NOOR SOCIETY,...
C.A. is sometimes used to identify the Chief Accountant & Chartered Accountant CAD see CASH AGAINST DOCUMENTS. CAFR see Comprehensive ...
In 1943, Dr. Abraham Maslow 's article "A Theory of Human Motivation" appeared in Psychological Review, which were further e...
MA-ECONOMICS FOR EXTERNAL CANDIDATES CRASH CLASSES PREVIOUS & FINAL MICRO ECONOMICS MACRO ECONOMICS ADVANCED STATISTICS FOR ECONOMICS...
INCOME TAX FOR B.COM STUDENTS
For Other Professional Qualifications All candidates seeking exemptions are required to apply on the prescribed Exemption form alongwith the...