Bookkeeping

inventoriable cost definition and meaning

For a manufacturer, these costs include direct materials, direct labor, freight in, and manufacturing overhead. For a retailer, inventoriable costs are purchase costs, freight in, and any other costs required to bring them to the location and condition needed for their eventual sale. Once an inventory item is consumed through sale to a customer or disposal in some other way,…

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What is process costing?

Firstly, it provides an accurate picture of the cost of production. This information is critical for manufacturers to determine their pricing strategy, ensuring that they are not selling their products at a loss. By knowing the exact cost of production, manufacturers can also identify areas where they can reduce costs and increase profitability. Substandard materials, breakdowns, accidents, wrong plant design,…

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6 Basic Financial Ratios and What They Reveal

What if your prospective investment target is borrowing too much? This can increase fixed charges, reduce earnings available for dividends, and pose a risk to shareholders. Called P/E for short, this ratio is used by investors to determine a stock’s potential for growth. It’s often used to compare the potential value of a selection of stocks. When buying a stock,…

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Amortization Wikipedia

When these intangible assets get consumed completely or are eliminated, then their accumulated amortization amount is also deleted from the balance sheet. In accounting, amortization refers to the practice of spreading out the expense of an asset over a period of time that typically coincides with the principle asset’s useful life. Amortizing https://1investing.in/predetermined-overhead-rate-formula-applications/ an expense is useful in determining the…

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What Is Accounting? The Basics Of Accounting

Accounting designed or meant for outsiders is known as financial accounting. It is concerned with the recording of business transactions and the periodic preparation of income statement, balance sheets and cash flow statement from such records. For example, a company has to reference specific time periods in reports and follow the same accounting method across time periods to ensure accurate…

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