FIFO..........................................

System

Hi<BR>Can someone help<BR>I understand the FIFO, LIFO and AVCO but my tutor gave me homework on these and i did these then on the last pages i had to do a standard one dont know what this is does anyone know what you do..........

System

FIFO..........................................

Osborne Tutorial book say:-<BR><BR>Other methods are standard cost, and replacement cost.<BR>Standard Cost:-<BR>This uses a pre-determined cost based on estimates of expected cost levels - referred to as standard costs. This level of cost is determined in advance so as to aid planning, cost control and pricing.<BR><BR>An example would be in a factory making cars. The costs of materials are assessed - based on past production and future predictions to establish a standard cost. The same process is carried out on anticipated wage levels. Finally a standard cost for materials and labour can be prepared which then would form the basis for any decision on car prices, and also be used to assess control of cost levels during actual production.<BR>SSAP9 stresses that standard costs should be reviewed frequently, to ensure that they bear a reasonable relationship to actual costs during the period. (Standard costs are studies in detail at NVQ level 4 Accounting)<BR><BR>So dont know if that helps u or not!<BR>Shaz

System

FIFO..........................................

in FIFO(First in First out)<BR>= say u have a product of a teddy bear worth £5.00 and then the next month u have another teddy bear worth £5.50. The first one u sell is the teddy worth 5.00 bcoz that is the first one that should be out. so when u record it in the stock control in issue column u must deduct it from the teddies that are worth £5.00.<BR>in LIF0(Last in Last out)<BR>=same situation but the one u sell is the new ones which is £5.50 because thats the last one. so in the stock control in issue column u deduct it from the latest one(£5.50).<BR>in AVCO<BR>=u just have to take the total cost(total cost of all the teddies,say we have 2 £5.00 teddies and 2 £5.50 teddies.it will be £21.00) and divide it by the total quantities which is 4(2+2teddies). And that will be the new cost price of the 4 teddies which is £5.25.