1.
What is a materials requisition form?
2.
What is a bill of materials?
3.
What journal entry is required when materials are issued from the store?
4.
Write down the most important methods of pricing material issues.
5.
What are cost price methods?
6.
Explain the first in, first out (FIFO) method of material costing.
7.
What are three advantages of the FIFO method?
8.
Define the last in, first out (LIFO) method of material costing.
9.
What are three advantages of the LIFO method?
10.
What is the average cost method?
Material Costing Methods Q&A FAQs
Material requisition form (MRF) has job number, date of the request, date needed, item description, number, amount, and signatures.
The average-cost system simplifies the process of tracking and calculating cost by using an average figure, especially helpful for businesses that deal with large volumes.
The last-in, first-out method (LIFO) of inventory costing is used for the calculation of cost of goods sold when the costs of producing a product or acquiring inventory have been increasing. This may be due to inflation.
First in, First out (FIFO) is a labeling method that requires you to label food with its expiration dates, then store it from older to newer. This allows you to find food more quickly and use it more efficiently.
A Bill of Materials ensures that all departments are working together toward mutual goals. To create an accurate BoM, you need input from design, procurement, manufacturing, and sales.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.
