BUS 251 Lecture 9: Chapter Seven: Inventory

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 251
• Professor: Anne Mac Donald

Document Summary

Definition: goods help for resale to customers, or to be used in manufacturing goods to be sold. through the manufacturing process) A(cid:374) asset (cid:449)ith a pro(cid:271)a(cid:271)l(cid:455) future (cid:448)alue. (cid:894)this esti(cid:373)ated future selli(cid:374)g pri(cid:272)e or (cid:448)alue that"s (cid:373)ade. Control, ownership, and security/protection: how much do we buy, when do we place an order, protection against, damage, obsolescence, theft from customers and employees. Lower leads to a (cid:862)prude(cid:374)t (cid:894)(cid:272)o(cid:374)ser(cid:448)ati(cid:448)e(cid:895)(cid:863) (cid:448)alue sale or use: nrv estimated selling prices minus any future costs that must be incurred so the company can sell them. Includes the cost of producing the inventory (like worker wages, etc) Begi(cid:374)(cid:374)i(cid:374)g i(cid:374)(cid:448)e(cid:374)tor(cid:455) (cid:894)(cid:449)hi(cid:272)h is fro(cid:373) last (cid:455)ear"s e(cid:374)di(cid:374)g (cid:272)ou(cid:374)t(cid:895) + pur(cid:272)hases (cid:894)(cid:449)hi(cid:272)h is fro(cid:373) the supplier"s i(cid:374)(cid:448)oi(cid:272)es/fa(cid:272)tor(cid:455) (cid:272)osts(cid:895) + tra(cid:374)sportatio(cid:374)/ta(cid:454)es (cid:894)(cid:449)hi(cid:272)h is fro(cid:373) other invoices) = goods. Cogas is split between ending inventory and cogs. Issue with this model does(cid:374)"t ide(cid:374)tif(cid:455) the theft e(cid:454)pe(cid:374)se: co(cid:373)pa(cid:374)(cid:455)"s just add to cog though. When inventory items have a change in price.