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Industries and business, in large scale or small scale usually holds the whole economy of the country as well as the nation. So the growth of business and industries actually indicate the economic growth of country or nation.Hence, every nation wants to flourish large and small scale industries and business in its economy.And for rapid growth of these industries, several strategy and method are needed to be adopted.
Inventory costing and capacity analysis is such a process which is taken for overall development of the business. If you want to know more about it doing your homework, you must click on myhomeworkhelp.com to get a perfect inventory costing and capacity analysis homework help.
In a nut-shell
Inventory is the excess production or stock which is kept for future to meet the excess market demand. This expense to bear a company for keeping that stock for a specific time period is known as inventory cost. This expenditure varies on the nature of the business and product, but generally, it is approximate 25% of the total value of the stock. So the accounting process that deals with the inventory cost termed as inventory costing
There are different four types of inventory costing method are used in a different business situation and financial condition. They are:
- First in first out
In this method inventory item are first sold in old cost.
- Last in first out
In this method, the latest cost price is considered as first selling prices.
- Average cost process
In this process, inventory cost is calculating on the basis of average purchasing price of total inventory.
- Specific identification process
In this process, exact price is applied to the corresponding unit item in the inventory.
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Capacity analysis is a critical review to specify the production capability of a company. It is performedon the basis of a huge research work which is often conducted by the third party. The main focus of this analytical process is to determine highest possible production of an organisation in a specific time, condition and infrastructure. That company can increase its production only after increasing the working condition and infrastructure, machinery and worker. It is very significant and crucial so, try to learn it by your heart with proper guidance. In this regard, you can really rely on us and our excellent inventory costing and capacity analysis homework help team.
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