Question
Explain why Companies assign raw materials costs when their materials storeroom issues the materials. Requests for issuing raw materials are made on a prenumbered materials
Explain why Companies assign raw materials costs when their materials storeroom issues the materials. Requests for issuing raw materials are made on a prenumbered materials requisition slip.
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Assigning raw materials costs when issuing materials from the storeroom through prenumbered materials requisition slips serves several purposes 1 Cost Tracking It allows companies to track the cost of raw materials used in production accurately This tracking is essential for financial reporting budgeting and cost control 2 Inventory Valuation Assigning costs at the point of issuance aids in maintaining an accurate valuation of the companys inventory This is crucial for determining the cost of goods sold and overall financial health 3 Budgeting and Planning Companies can use the information on materials requisition slips to plan and budget effectively It provides insights into how much is being spent on raw materials for specific projects or periods 4 Internal Control Prenumbered requisition slips help establish internal controls Each requisition slip is accounted for reducing the risk of unauthorized or undocumented material ...
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Accounting Information Systems
Authors: James A. Hall
10th Edition
1337619205, 978-1337619202
