How to determine the actual cost of finished goods
Video: Finished Goods Inventory 2024, July
For the profitable sale of goods you need to be able to correctly determine the actual cost of production. By finished products we mean products that have passed all stages of technological processing and appropriate control. Those products that did not pass it are considered incomplete and do not apply to finished products.
You will need
- - cost accounting and direct costs;
- - a method for evaluating finished products.
Instruction manual
1
Finished products - this is part of the inventories that are intended for sale. Evaluation of finished products is carried out at actual or planned production costs. The cost of the finished product is either all costs that are included in the production cost, or only direct costs, if indirect costs are written off from account 26 to account 90. Finished products are recorded on account 43, which bears the corresponding name.
2
In practice, the methodology for assessing finished products at actual production costs is rarely used, usually in small enterprises where the range of goods is limited. For other types of production, such a method is very laborious. This is due to the fact that the actual cost of finished products is determined only at the end of the reporting month. And during this time, there is a constant movement of products. Therefore, for accounting use a conditional assessment of products at the planned cost or selling price without VAT.
3
The use of the selling price is possible only if it is constant for a month. Otherwise, it is more advisable to keep track of the planned cost. It is defined as follows: the planning department, on the basis of the actual cost of the past period and the estimated change in the price level, introduces a certain constant accounting price throughout the month.
4
Manufactured products are debited from credit 23 to debit 26. And the cost of finished products shipped to customers from credit 26 to debit 901. At the end of the month, calculating the actual production cost, the deviation of the accounting price from the actual production cost and the deviation related to the sold products are determined.
