INTRODUCTION TO MANAGEMENT ACCOUNTING

This lesson introduces the inventory valuation method. Inventory is company’s current assets and it is the driving force behind the company’s ability to generate revenue and profits. Hence,  the company needs to manage inventory in a cost-efficient way to optimize company profit.

By the end of this lesson, you should be able to:

explain the materials recording procedure, procurement, and storage and store control

calculate cost material issues using:

o     first in  First out (FIFO)

o     Last in  Last out (LIFO)

o     Weighted average (AVO);

•  evaluate and compute EOQ, maximum stock level& minimum stock level; and
•  discuss the advantages and disadvantages of the above three methods