Inventory Flashcards
1
Q
Unit cost of inventory
A
A cost incurred in order to bring inventory into a location and condition to be sold which can be directly allocated to individual units of inventory on a logical basis (i.e. includes anything that is able to be logically attributed to one unit such as cartage in for $10 per unit)
2
Q
Cost of goods sold
A
All cost that are incurred in order to bing inventory into a condition and location ready for sale. Eg. The
- purchase price
- Freigt in
- Modifications
- Customs / import duties
- Any other buying expenses
3
Q
Period cost
A
A cost incurred in order to bring inventory into a condition and location that is ready for sale that is not allocated to individual units of inventory because there is no logical basis to do so.
