Module 11 - Inventories Flashcards
1
Q
Costs of purchase excluded (4)
A
- trade and settlement discounts
- rebates
- subsidies
- VAT
2
Q
If actual production < normal capacity
A
Fixed costs / normal capacity
3
Q
If actual production > normal capacity
A
Fixed costs / actual production
4
Q
Other costs included only if
A
Necessarily incurred to bring inventories to current location and condition
5
Q
Other costs to exclude (4)
A
- abnormal amounts of waste
- storage costs unless used in production process
- administrative overheads
- selling costs
6
Q
Standard cost=
A
Standard cost materials, supplies, Labour, efficiency + variances that arise when actual cost deviates from standard
MAY NEED TO PRO RATE
7
Q
Normal (recurring) variances
A
Adjust
8
Q
Abnormal (non-recurring) variances
A
Do not adjust
9
Q
Retail method
A
Retail (sales) value - gross margin
10
Q
Cost < NRV
A
No adjustment
11
Q
Cost > NRV
A
Adjustment needed
