22 April 2008
IT DEPENDS ON FOLLOWING: 1. Industry type, 2. Stages Involved, 3. Average material in each stage, 4. Size of plant of each stage, 5. Nature of Materials and final products, 6. Management policy of purchase, 7. Value, Mass and processes involved
22 April 2008
SRI DASHRATH IS RIGHT. THE BASIC RULES ARE SIMPLE AND COMMON WITH A FEW EXCEPTIONS. USUALLY THE RAW MAT.CONSUMED PORTION IS VALUED AT COST ( PRICING OF ISSUES BASED ON LIFO/FIFO/WT.AVERAGE ETC.) PLUS A PROPORTION OF LABOR AND VARIABLE MFG. COSTS ADDED AFTER ASCERTAINING THE STAGE UPTO WHICH THE PRODUCT IS FINISHED LIKE 25% COMPLETED OR 50% COMPLETED ETC... TO ASCERTAIN THE % OF COMPLETION TE PLANT TECHNICAL STAFF CAN HELP. THE PRODUCTION CYCLE IS DIFF. IN DIFFERENT IND. LIKE CONTINNUOUS PROCESS INDUSTRY ( LIKE OIL) OR SEASONAL INDUSTRY ( LIKE SUGAR) PERISHABLE PRODUCTS (LIKE MILK PRODUCTS ). THE NATURE AND QULALITY OF RAW MAT. CAN SOME TIME RESULT IN VARIATIONS IF NOT DISTORTIONS IN VALUATION AS HAPPENS IN GLASS IND . WHERE SAND IS A RAW MATERIAL. DUE TO RAINS OR WET / SOAKED SAND CONDITIONS THE SAND WHEN AFFECTED , THIS CERTANLY AFFECTS THE IN PROGRESS CONTENTS OF GLASS. DR.B.K.BHAR'S COSTING METHODS CAN SURELY BE OF HELP IN VALUING WIP. R.V.RAO
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