Retail Company is a type of company wherein, only finished products are bought and sold with a profit margin. Manufacturing company is a type of company, which purchases raw materials, processes it and converts it into finished goods. The difference between inventory accounting for a retail company and a manufacturing company.

Question

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Answer 1

Question

Chapter 8, Problem 1Q

To determine

Retail Company is a type of company wherein, only finished products are bought and sold with a profit margin.

Manufacturing company is a type of company, which purchases raw materials, processes it and converts it into finished goods.

The difference between inventory accounting for a retail company and a manufacturing company.

Expert Solution & Answer

Explanation of Solution

In a retail company, only finished goods are taken into consideration while in a manufacturing company, raw materials, work in progress and finished foods are taken into consideration.
Inventory in a retail company is valued at selling price (cost price+administration expenses +selling and distribution expenses) where as inventory in a manufacturing company is valued at cost price (Direct cost+ Factory overheads+ Financial cost).
Valuation of inventory in a retail company is done quarterly, half yearly or annually, whereas, in a manufacturing company, valuation is done as and when the process of conversion of raw materials into finished goods starts.

Conclusion

Thus the above discussed points are the differences between retail and manufacturing company.

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Students have asked these similar questions

Quick answer of this accounting question

Socrates Manufacturing's budget for the coming year includes $840,000 for manufacturing overhead, 95,000 hours of direct labor, and 600,000 hours of machine time. If Socrates applies overhead using a predetermined rate based on machine hours, what amount of overhead will be assigned to a unit of output which requires 0.80 machine hours and 0.30 labor hours to complete?

Compute the lower-of-cost-or-net realizable value for the company's inventory.

Answer 2

Question

Chapter 8, Problem 1Q

To determine

Retail Company is a type of company wherein, only finished products are bought and sold with a profit margin.

Manufacturing company is a type of company, which purchases raw materials, processes it and converts it into finished goods.

The difference between inventory accounting for a retail company and a manufacturing company.

Expert Solution & Answer

Explanation of Solution

In a retail company, only finished goods are taken into consideration while in a manufacturing company, raw materials, work in progress and finished foods are taken into consideration.
Inventory in a retail company is valued at selling price (cost price+administration expenses +selling and distribution expenses) where as inventory in a manufacturing company is valued at cost price (Direct cost+ Factory overheads+ Financial cost).
Valuation of inventory in a retail company is done quarterly, half yearly or annually, whereas, in a manufacturing company, valuation is done as and when the process of conversion of raw materials into finished goods starts.

Conclusion

Thus the above discussed points are the differences between retail and manufacturing company.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 8, Problem 1Q

To determine

Retail Company is a type of company wherein, only finished products are bought and sold with a profit margin.

Manufacturing company is a type of company, which purchases raw materials, processes it and converts it into finished goods.

The difference between inventory accounting for a retail company and a manufacturing company.

Expert Solution & Answer

Explanation of Solution

In a retail company, only finished goods are taken into consideration while in a manufacturing company, raw materials, work in progress and finished foods are taken into consideration.
Inventory in a retail company is valued at selling price (cost price+administration expenses +selling and distribution expenses) where as inventory in a manufacturing company is valued at cost price (Direct cost+ Factory overheads+ Financial cost).
Valuation of inventory in a retail company is done quarterly, half yearly or annually, whereas, in a manufacturing company, valuation is done as and when the process of conversion of raw materials into finished goods starts.

Conclusion

Thus the above discussed points are the differences between retail and manufacturing company.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 8, Problem 1Q

To determine

Retail Company is a type of company wherein, only finished products are bought and sold with a profit margin.

Manufacturing company is a type of company, which purchases raw materials, processes it and converts it into finished goods.

The difference between inventory accounting for a retail company and a manufacturing company.

Expert Solution & Answer

Explanation of Solution

In a retail company, only finished goods are taken into consideration while in a manufacturing company, raw materials, work in progress and finished foods are taken into consideration.
Inventory in a retail company is valued at selling price (cost price+administration expenses +selling and distribution expenses) where as inventory in a manufacturing company is valued at cost price (Direct cost+ Factory overheads+ Financial cost).
Valuation of inventory in a retail company is done quarterly, half yearly or annually, whereas, in a manufacturing company, valuation is done as and when the process of conversion of raw materials into finished goods starts.

Conclusion

Thus the above discussed points are the differences between retail and manufacturing company.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 8, Problem 1Q

To determine

Retail Company is a type of company wherein, only finished products are bought and sold with a profit margin.

Manufacturing company is a type of company, which purchases raw materials, processes it and converts it into finished goods.

The difference between inventory accounting for a retail company and a manufacturing company.

Expert Solution & Answer

Explanation of Solution

In a retail company, only finished goods are taken into consideration while in a manufacturing company, raw materials, work in progress and finished foods are taken into consideration.
Inventory in a retail company is valued at selling price (cost price+administration expenses +selling and distribution expenses) where as inventory in a manufacturing company is valued at cost price (Direct cost+ Factory overheads+ Financial cost).
Valuation of inventory in a retail company is done quarterly, half yearly or annually, whereas, in a manufacturing company, valuation is done as and when the process of conversion of raw materials into finished goods starts.

Conclusion

Thus the above discussed points are the differences between retail and manufacturing company.

Answer 6

Chapter 8, Problem 1Q

To determine

Retail Company is a type of company wherein, only finished products are bought and sold with a profit margin.

Manufacturing company is a type of company, which purchases raw materials, processes it and converts it into finished goods.

The difference between inventory accounting for a retail company and a manufacturing company.

Expert Solution & Answer

Explanation of Solution

In a retail company, only finished goods are taken into consideration while in a manufacturing company, raw materials, work in progress and finished foods are taken into consideration.
Inventory in a retail company is valued at selling price (cost price+administration expenses +selling and distribution expenses) where as inventory in a manufacturing company is valued at cost price (Direct cost+ Factory overheads+ Financial cost).
Valuation of inventory in a retail company is done quarterly, half yearly or annually, whereas, in a manufacturing company, valuation is done as and when the process of conversion of raw materials into finished goods starts.

Conclusion

Thus the above discussed points are the differences between retail and manufacturing company.

Answer 7

Chapter 8, Problem 1Q

To determine

Retail Company is a type of company wherein, only finished products are bought and sold with a profit margin.

Manufacturing company is a type of company, which purchases raw materials, processes it and converts it into finished goods.

The difference between inventory accounting for a retail company and a manufacturing company.

Answer 8

Expert Solution & Answer

Explanation of Solution

In a retail company, only finished goods are taken into consideration while in a manufacturing company, raw materials, work in progress and finished foods are taken into consideration.
Inventory in a retail company is valued at selling price (cost price+administration expenses +selling and distribution expenses) where as inventory in a manufacturing company is valued at cost price (Direct cost+ Factory overheads+ Financial cost).
Valuation of inventory in a retail company is done quarterly, half yearly or annually, whereas, in a manufacturing company, valuation is done as and when the process of conversion of raw materials into finished goods starts.