TOPIC 8: INVENTORY/STOCK VALUATION

Self-Assessment/Review Questions:

(Please Proceed to Assignment to Answer)

1. ________________ is the estimated selling price in the ordinary course, less estimated cost of
completion and to make a sale.

2. ________________ is the actual purchase price of goods and services at the time of procurement.

3. ________________ represents the cost to replace an existing goods or inventory.

LET’S PRACTICE!

(Please Proceed to Graded Assessment to Answer)

Solve at least 1 exercise/problem related to the topic. As part of summative/graded assessments, the
compilation of solved problems will be submitted at designated pick-up points or using the
communication channel available to you on a specified date.

Solve Problem:

P3-6 and P3-7 on page 116

Chapter 3 – Accounting for Materials

Integrated Cost Accounting – Principles and Applications

By: Marlon Oyzon Flores 2016 First Edition

KEY TAKEAWAYS:

Materials are the major component of the total costs of manufacturing a product, and the most
important assets in a manufacturing business. The total costs of a product can be reduced and
controlled by using the materials efficiently.

Raw Materials inventory is one of the three (3) types of inventory of manufacturing companies that
cannot be found in a merchandising company.

FIFO method did not always produce the same ending inventory balance for both periodic and perpetual
systems. It produces different ending inventory balances when there are materials issued to production
and subsequently returned to the storeroom and remain unissued at the accounting period.