International Trade and Customs

CONTABILIDAD DE COSTOS

PRODUCTO DE METODO DE VALUACIÓN DE

INVENTARIOS

Submitted by:
G
ra Ruiz Reyes Juan
de:
4º
Group: F

Submitted to:

Lic. JAZMIN MEJIA

Tolcayuca, Hgo., MAR, 2021

 What are inventory valuation methods?

Method 1: First In, First Out (FIFO)

FIFO (first in, first out) for its acronym. It states that the first products to be
purchased are the first to be sold, with the most recent items remaining in
inventory.

Contrary to LIFO, this method makes the most realistic assumption in practice. The
most logical thing is that those items with more time in inventory are sold, reducing
the risk of obsolescence or expiration.

With FIFO, the inventory that remains in the warehouse is valued at a price close
to the value set by the market (considering an inflationary period). In other words,
items that have been in inventory for the longest time tend to have a lower cost
than recently purchased items.

The latter is what leads us to have a lower cost of sales and with it an increase in
the profit obtained by the company, but also an increase in the payment of taxes.

Method 2: Last In, First Out (LIFO)

Last in, first out or LIFO. This valuation method is the opposite of FIFO by stating
that the last units that entered will be the first to be sold.

In practice, it is not a widely used method but is usually taught in academia, as it is

the opposite of FIFO.

Method 3: Weighted average

In this method we average the cost of inventories in stock, therefore with each unit
that comes in (those that are purchased) the average is updated.

In other words, with this method we divide the cost of the items offered for sale by
the number of units we have in stock.
 Inventory Valuation System of
"BIMBO"

The production of white bread, one of BIMBO's flagship products, is governed by

strict quality standards that ensure production free from irregularities in the
processes, as well as products from renowned companies worldwide that act as
raw material suppliers, which are detailed below:

- Skim milk powder

- Liquid and powdered egg
- Corneal
- Sugar
- Butters and oils
- Yeast
- Iodized salt
- Packaging
- Wires (seals)

However, the main product used by BIMBO in its production processes is wheat
flour, which is mainly purchased from local mills.

CYCLE INVENTORY. - Average demand between one order and another.

System = Production, transport or purchase of a larger batch

SEASONAL INVENTORY. - Seasonal Demand and Inventory turnover

Due to the nature of the products it produces, BIMBO maintains a high production
input inventory turnover rate because most of these products are perishable to a
greater degree, such as the inputs necessary for box bread, sweet bread, pastry
and cookies.
These high turnover rates are in line with the BIMBO Group's policy of keeping
fresh products on the market, and considering that these are highly perishable,
BIMBO manages all of its inventories at an operational level under the first-in, first-
out method. , that is, the raw material with the oldest arrival date is used. In this
sense, most of the inventories are managed by the supplier and are supplied to the
BIMBO group on a recurring basis, even with a daily delivery frequency.
 EXERCISE OF “BIMBO” USING THE three METHODS

 On March 4, 215, units are purchased at a price of $ 110.

 On March 8, 400, units are purchased at a price of $ 100.
 On March 17, 590, units are sold at a price of $ 240.
 On March 22, 200, units are purchased at a price of $ 105.
 On March 30, 175, units are sold at a price of $ 210.

The costs per unit are shown in the table for each method.
REFERNCES

Betancourt, D. F. (30 de abril de 2018). Valuación o valoración de inventarios:

métodos, procedimiento.