Tag Archives | Materials

Documents Required for Purchasing Stores Routine | Cost Accounting

The normal process of purchasing, storing, control and issue of materials consists of the following documents:- 1. Bill of Materials 2. Purchase Requisition 3. Purchase Order 4. Material Inspection Note 5. Goods Received Note (GRN) 5. Goods Received Note (GRN) 6. Stores Requisition Note 7. Material Transfer Note 8. Material Return Note 9. Bin Card […]

Notes on Scrap | Materials

The below mentioned article provides a note on scrap. Scrap is the residue material that has a recovery value. It is incidental residue from the materials used in manufacturing operations which is recoverable and measurable without processing. Accounting of Scrap: The accounting treatment of scrap is based on the following considerations: (a) If the value […]

Notes on Defectives | Materials

The below mentioned article provides a note on defectives. Defectives represent the part of production that does not meet dimensional or quality specifica­tions of a product but which can be reworked by additional application of material, labour and/ or processing and made it into saleable condition either on first or seconds depending upon the characteristic […]

Notes on Spoilage | Materials

The below mentioned article provides a note on accounting and control of spoilage. Meaning of Spoilage: Spoilage is the production that fails to meet quality or dimensional requirements and these are so damaged in manufacturing operations that they are not capable of rectification economically and hence taken out of the process and disposed off without […]

Accounting Notes on Waste | Materials

The below mentioned article provides a note on waste. Meaning of Waste: Waste is a material loss during production or storage due to evaporation, chemical reaction, unrecoverable residue, shrinkage etc., wastage may be visible or invisible wastage. Wastage may be normal waste incidental to manufacturing activities or abnormal waste which is in excess of material […]

Treatment of Items in Material Pricing | Cost Accountancy

The treatments are: 1. Pricing of Materials Returned to Supplier 2. Pricing of Materials Returned from Production Department 3. Transfer of Materials from One Job to Another 4. Treatment of Material and Production Losses 5. Scrap 6. Spoilage 7. Defective Work/Rejects. Treatment of Items in Material Pricing: Pricing of Materials Returned to Supplier Pricing of […]

Material Pricing: Objectives, Problems and Adjustments

In this article we will discuss about Material Pricing:- 1. Objectives of Material Pricing 2. Problems of Material Pricing 3. Features 4. Determination. Objectives of Material Pricing: There are two main objectives of material pricing: (a) To charge the cost of materials issued to production on a realistic and consistent basis. (b) To provide a […]

Perpetual Inventory System | Cost Accountancy

In this article we will discuss about Advantages and Disadvantages of Perpetual Inventory System. Advantages of Perpetual Inventory System: The following advantages can be derived from Perpetual Inventory System: (i) The long and costly work of a stock-taking count can be avoided. (ii) It does not become necessary to stop production at the time of […]

ABC Analysis of Inventory Control | Cost Accountancy

In this article we will discuss about the BC Analysis of Inventory Control:- 1. Meaning of ABC Analysis 2. Advantages of the ABC Analysis 3. Limitations. Meaning of ABC Analysis: In case of a big manufacturing unit which uses a large number of items for production purpose, it becomes difficult to comprehend such enormous number […]

Top 2 Methods of Pricing Materials | Cost Accountancy

The following points highlight the top two methods of pricing materials. The methods are: 1. Based On Cost Price 2. Average Price Method. Pricing Materials: Category # 1. Based On Cost Price: (a) Specific Price Method: Under this method the specific price of materials issued to a particular job is charged to the job. This […]

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