CHAPTER 7
Inventory Management
LEARNING OBJECTIVES
After reading this chapter, you should be able to answer the following questions:
How are inventories presented on a company's financial statements?
How does the flow of inventory costs differ between a manufacturing and a merchandising company?
What are the various methods used to value inventory? How are these methods applied in practice?
What are the benefits and challenges of just-in-time (JIT) inventory management?
Why are inventory management practices important in controlling costs of inventory?
This chapter begins with an explanation of inventory as it relates to financial reports for both merchandising and manufacturing enterprises. It then looks at the alternative methods of inventory valuation, including job costing, process costing, and costing of inventory for services. The chapter also looks at just-in-time (JIT) inventory practices and long-term contract costing. It concludes by looking at inventory management and control. ...
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