This category typically includes cost centers for active inventory and planned inventory write-offs. Ideally costs can be segmented by inventory class (i.e. A, B, C, D), inventory type (i.e. raw material, work-in-process, finished goods), storage location, and inventory life-cycle stage (i.e. new product, active, excess and obsolete).
Determine and clarify the logistics cost. Logistics cost Logistics cost usually differently defined by different company. But, in general logistic is defined as the process of the management of goods that across all over the countries and also across the world. The company create a good path of their goods into supply chain or transport path which the use repeatedly to get a goods shipped to customers. Transportation cost Transportation cost is known as all the expenditure that involved in the movement of product, assets or something that needs the changes of one point to a different place that commonly passed to the customers.
For example, indirect procurement will be responsible to buy MRO (Managing, repairing and operating materials) items such as maintenance machine or cooling oil or packaging materials and safety gloves, ORM items (Operating Resource Management) such as office supply and company utility. Even though both ORM and MRO are purchased under the same indirect procurement group, these two types of items should be managed differently because ORM belongs to white collar (indirect office supplies) while MRO belongs to blue collar (indirect industrial good). Therefore, they have to distinguishing procurement process due to the levels of complexity and enormous variance in cost and volume. For example, MRO items are sometimes listed as stocked items in inventory and accompanied with more complicated and fundamental specifications
Inventory cost is the costs that involved when storing and holding the goods. Inventory costs included several costs such as inventory carrying cost, capital cost, storage space cost, inventory service cost, inventory risk cost, order and setup cost, expected stock-out cost, and in-transits inventory carrying costs. Basically, inventory carrying cost included capital cost, storage space cost, inventory service cost and inventory risk cost. Capital cost is the cost that a company pay to purchase the inventory. It plays an important role in inventory carrying cost as it expresses the percentage of the dollar value of the inventory that is holding by a company.
The aim of both systems is to determine the cost of the productive unit and to provide the management with the required data and reports, but there is a difference in the way of determining the cost, for example Written Assignment Unit 2 4 in process costing system cost of the units produced is determined at the end of the agreed cost period. While in the job orders system the cost is determined by the end of the operation and not the order and the reports are submitted after the end of each production order separately. 2. Production in the process costing system is standard, homogenous and continuous, whereas Production in the job orders system is subject to special conditions and demands and the production is usually
The plans embody a sales budget, production budget, direct materials budget, direct labor budget, producing overhead budget, sales and body budget, and stuck assets budget. All of those plans roll up into the master budget, that contains a budgeted operating statement, record,
e. Pricing Policy • Changes in the pricing policy will affect products to be purchased or sold as well as the logistics strategy, primarily because it identifies responsibility for different logistics activities. • The transfer of title to products and the responsibility for transportation in the distribution channel are affected by price policy. • Even though costs are transferable through the logistics channel no matter how they are allocated by the pricing policy, some companies design their logistics network according to the costs for which they are directly in charge. • When a company has a price mechanism where the consumer pays for the delivery of products, the resulting strategy is probably to be one where there are few stocking
BASIC DIFFERENCE IN PRACTICAL & THEORETICAL COST SAVING METHODS COST is “the price paid or required for acquiring, producing or maintaining something, usually measured in money, time, or energy”. “It is an expense or expenditure” -reverso.net- COST SAVING is a cost reduction that can be specifically identified and will be made to a budget or program, resulting from implementing a specific alternative in lieu of continuing the present system.” There are relatively a lot of business strategies available to support and decrease costs in the corporate world. Some of these are streamlining of the manufacturing methods, increasing the cash flow and searching for discounted purchases. Effective cost saving strategies can be useful in
Historical cost accounting refers to the measure of value used in accounting in which the price of an asset at the balance sheet is based on its nominal or original value when acquired by the company. The historical-cost method is used for assets in the U.S. under generally accepted accounting principals (GAAP). Based on the historical-cost principle, under U.S. GAAP, most assets held on the balance sheet are to be recorded at the historical cost even if they have significantly changed in value over time. The main advantage of using historical cost is that it is objectivity. When using historical cost accounting to record assets such as property, vehicles and equipment, the original cost of an item at the time of purchase is documented with
Inbound logistics: Inbound logistics is one of the fundamental systems of logistics, concentrating on purchasing and organizing the inbound advancement of materials, parts, and/or finished stock from suppliers to collecting or get together plants, dissemination focuses, or retail stores. Given the organizations performed by logisticians, the rule fields of logistics can be isolated as takes