BUS 251 Chapter Notes - Chapter 7: Consignee, Combined Gas And Steam, Consignor

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 251
• Professor: Susan Bubra

Document Summary

Inventory: any item purchased by a company for resale to customers or use in the manufacture of items to be sold to customers. Signiicance of inventory: for retailers and manufacturers, it is the most signiicant current asset: the largest asset that will be converted to cash over the next year. Management"s objecive is to sell it to customers at a higher price than the company purchased it for. Ensuring that there isn"t too much siing unsold, and also not so litle that there is a stock out (runs out). Set a sale price that generates proit and is also compeiive. Major classiicaions of inventory: merchandisers" and retailers" inventory consists of inished goods that have been purchased for resale. Raw materials: all items required to make a product i. e. wood, plasic, fabrics etc. Work in process: costs of products that have been started but not yet completed including raw materials, overhead costs that incurred when the product was being made.