Why should the inventory purchased by the property industry be included in the cost?

1, FIFO method. It refers to the method of determining the actual cost of issued inventory and ending inventory according to the order of purchase under the assumption that the inventory purchased first is issued first. The specific method is: when receiving the inventory, register the quantity, unit price and amount of the received inventory one by one; When issuing inventory, register the issuing cost and balance amount of inventory one by one according to the principle of first-in first-out.

The first-in first-out method can carry forward the inventory delivery cost at any time, but it is more complicated; If there are many inventory receiving and dispatching businesses, the inventory unit price is unstable and the workload is heavy. When prices continue to rise, the ending inventory cost is close to the market price, while the distribution cost is low and the profit is high.

2, the final advanced method. It refers to the method to determine the actual cost of issued inventory and ending inventory under the assumption that purchased inventory is issued first.

LIFO method can also carry forward the cost of inventory delivery at any time, but it is also cumbersome; If there are many inventory receiving and dispatching businesses, the inventory unit price is unstable and the workload is heavy. However, when prices continue to rise, the inventory cost at the end of the period will be lower than the market price, while the distribution cost will be high and the profit will be low.

(LIFO method is no longer used, only for your understanding)

3. Weighted average method. Refers to the method of calculating the average unit price of month-end inventory with the beginning inventory quantity and the current inventory quantity as weights, so as to calculate the actual cost of the inventory issued in the current month and the inventory balance at the end of the month. The formula is:

Weighted average unit price = (actual cost of inventory in opening balance+actual cost of inventory in current period)/(inventory in opening balance+inventory in current period)

basis

Actual cost of inventory issued in this period = quantity of inventory issued in this period * weighted average unit price.

= actual cost of inventory with opening balance+actual cost of inventory with current income-actual cost of inventory with current issue.

The weighted average method is simpler than the above two methods, which is conducive to simplifying cost calculation, but not conducive to the daily management and control of inventory costs.

4. Moving weighted average method. It refers to the method of calculating the new average unit cost of inventory immediately after each purchase as the pricing basis for the next delivery.

The formula is:

Weighted average unit price = (actual cost of inventory before income+actual cost of inventory in current period)/(inventory before income+inventory in current period)

Actual cost of inventory issued in this period = quantity of inventory issued in this period * weighted average unit price.

Using the moving weighted average method can make the management know the inventory balance in time, and the calculated average unit cost and the inventory cost of delivery and balance are more objective. However, because the average unit price must be calculated every time the goods are received, the calculation workload is large, which is not suitable for frequent receiving and sending.

5. Individual pricing method. Refers to the method of pricing the actual cost of each inventory according to the actual cost at the time of purchase.

The cost calculation of individual pricing methods is accurate and in line with the actual situation, but in the case of frequent receipt and delivery of inventory, the workload of cost analysis is large.

In practical work, many people first calculate the warehousing, warehousing and balance of inventory according to the planned cost, and calculate the difference between the actual cost and the planned cost in time. At the end of the month, the above difference will be allocated to the cost of issuing inventory in a certain proportion, and the planned cost of issuing inventory will be adjusted to the actual cost.