Lecture FOUR: Material, labour and expense costing

1. Inventories

1.1. Stock (from UK)

1.2. Opening inventory

1.3. Closing inventory

1.4. (Cost of) purchase

1.5. Cost of goods sold (COGS)

1.6. Carriage inwards

1.7. Carriage outwards

1.8. Goods written off

1.9. Goods written down

1.10. Net realisable value

2. INVENTORIES CALCULATION

2.1. Buffer inventory

2.2. First In First Out method

2.3. Last In First Out method

2.4. Weighted Average method (Also called: Average pricing method)

2.5. Periodic

2.6. Perpetual

3. INVENTORIES COSTS

3.1. Ordering costs

3.2. Holding costs

3.3. Stockout costs

4. Stockout costs

4.1. Clerical and Administrative costs

4.2. Transport costs

4.3. Production run costs

5. HOLDING COSTS

5.1. Costs of storage

5.2. Stores operation costs

5.3. Interest charges

5.4. Insurance costs

5.5. Obsolescence

5.6. Deterioration

6. STOCKOUT COSTS

6.1. Loss of contribution from Lost sales

6.2. Loss of future sales due to disgruntled customers

6.3. Loss of customer good will

6.4. Cost of production stoppages

6.5. Labour frustration/inefficiency

6.6. Extra ordering cost for urgent orders

7. INVENTORY CONTROL LEVEL

7.1. Minimum level

7.2. Maximum level

7.3. Avarage inventory

7.4. Bill of material

7.5. Economic Order Quantity

8. TYPE OF EXPENSES

8.1. Building costs

8.2. People-related costs

8.3. Machine operating costs

8.4. Information processing costs

8.5. Finance costs

8.6. Selling and distribution costs

8.7. Consulting fees, Professional fees ...

9. DEPRECIATION

9.1. Straight line method

9.2. Reducing balance method

9.3. (Each) installment

9.4. In proportion

9.5. Part exchange

9.6. Obsolete

9.7. Wear out

9.8. Useful life

9.9. Sell off

9.10. Profit/Loss on disposal (of non-current asset)

9.11. Write off

9.12. Depreciation rate

9.13. Depreciable

9.14. Residual value – Salvage value

9.15. Net book value (NBV)

9.16. Accumulated depreciation

9.17. Allocate