COMM-3016EL Chapter 8: Inventory
14 Mar 2018
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Document Summary
Retailers and wholesalers have inventory that is ready for sale . Merchandise inventory inventory purchased in a form ready for sale. Manufacturing companies, on the other hand, have inventories in various stages of completion: Raw materials inventory the costs assigned to goods and materials on hand, but not yet placed into production. Work-in-process inventory cost of the raw materials on which production has started but isn"t completed. Finished goods inventory the reporting of the costs associated with the completed but unsold units at the end of the fiscal period. Companies must monitor inventory levels carefully in order to: Minimize carrying costs the higher the levels of inventories held, the higher the carrying costs (ex. investment, storage, insurance, taxes, obsolescence, risk of theft, and damage). Meet customer demands inventory levels that are too low may lead to running out of specific products, lost sales, and unhappy customers.
