unit-2.power point presentation cost accounting

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1. COST ACCOUNTING UNIT II MATERIALS

2. (A)MATERIAL CONTROL Material control is a system which ensures required quantity of material of the required quality at the right time and place with minimum investment of capital.

3. Organisation of material control: Purchasing department Receiving & I nspection department Store keeping department Production department Stock control department

4. (B)PURCHASE CONTROL Purchasing includes procuring of raw materials, stationery, machines,tools,spares,equipment,maintenance,supplies required for business., etc .

5. Centralized Vs. Decentralized Purchasing Centralized purchasing refers to purchasing of requirements of the entire organization by one particular department. Decentralised purchasing refers to each of the department in an organization buying their requirements directly.When the organization has number of branches or divisions

6. PURCHASE MANAGER: Purchasing manager of a company occupies a very important position.Since,he has the power to use the large amount of working capital to be invested on materials.

7. PURCHASE PROCEDURE: Receiving authorized purchase requisition. Studying the market and selecting a supplier. Issuing purchase order and following up delivery. Arranging for receiving and inspection of materials. Verifying and passing suppliers invoice for payment.

8. (C)STORE KEEPING & STOCK CONTROL OR INVENTORY CONTROL Store keeping is a specialized function involving efficient management of materials, identifying, classifying and maintenance of stock records.

9. Inventory control and its techniques Level of stock and EOQ ABC analysis Just in time(JIT) VED analysis (Virtual, Essential and Desirable) FNSD analysis(Fast, Normal,Slow and Dead moving items) AOS ( Automatic Order System) Ordering cycle method Min-Max method Inventory Turnover Ratio Input-output ratio analysis Material(Inventory) cost reports.

10. (D)PRICING OF MATERIAL ISSUES 1.COST PRICE METHOD FIFO(First in First out) LIFO ( Last in First out) Specific price Base stock HIFO ( Highest in First out)

11. 2.AVERAGE PRICE METHOD Simple average Weighted average Periodic simple average Periodic weighted average Moving simple average Moving weighted average

12. 3.NOTIONAL PRICE METHODS Standard price Inflated price Re-use price Replacement price

13. MATERIAL LOSSES Waste Scrap Spoilage Defectives Slow moving & Dormant stocks