BU127 Chapter 8: BU127 Chapter 8 Notes
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BU127 Full Course Notes
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Document Summary
Inventory is tangible property that is either: held for sale in the normal course of business, used to produce goods or services for sale, merchandise inventory, includes goods held for resale in the ordinary course of business, raw materials inventory, includes items acquired for the purpose of processing into finished goods, work in process inventory, includes goods in the process of being manufactured, finished goods inventory, includes manufactured goods that are complete and available for sale. Flow of inventory costs: when merchandise is purchased the merchandise inventory account is increased, and when they are sold it decreases, for raw labour there are extra expenditure to prepare and are add to the work in process, manufacturing costs, direct labour: refers to the earning of employees who work directly on the products being manufactured, factory overhead: comprises manufacturing costs that are not raw material or direct labour costs.
