What are the calculation methods of enterprise inventory cost?

The inventory cost incurred by an enterprise refers to various expenses incurred by the enterprise for inventory, such as purchasing cost and warehousing cost. How to calculate the inventory cost?

Inventory cost calculation method

1. Actual cost method: the actual cost is used for accounting, which is generally suitable for enterprises with small scale, simple inventory and less procurement business.

2. Planned cost method: If the planned cost accounting method is adopted, it is generally applicable to enterprises with various inventory types and frequent receiving and sending. Such as various raw materials and low-value consumables of large and medium-sized enterprises.

Inventory cost is the sum of all kinds of costs in the process of obtaining inventory, which generally includes purchase price, freight, loading and unloading fee, sorting fee before warehousing, non-deductible input tax, etc. Paragraph 1 of Article 20 in Chapter II of the Accounting System for Enterprises stipulates that the purchased inventory shall be regarded as the actual cost according to the purchase price plus transportation fees, handling fees, insurance fees, packaging fees, storage fees and other expenses, as well as reasonable loss in transit, sorting fees before warehousing, taxes and other expenses that should be included in the cost according to regulations.

Difference between inventory cost and book value of inventory

Inventory cost refers to the initial entry value of inventory, and inventory book value refers to the balance of inventory book balance MINUS inventory depreciation reserve.

Inventory valuation method

Inventory valuation method is one of the accounting treatment methods of enterprises. The choice of inventory valuation method is an important content of formulating enterprise accounting policy. There are three methods of inventory valuation: individual valuation method, first-in first-out method, weighted average method and moving weighted average method.

Definition of inventory

Inventory refers to the finished products or commodities held by enterprises for sale in their daily activities, materials consumed in products and production processes, and materials providing services, including various materials, products in process, semi-finished products, finished products, commodities, packaging materials, low-value consumables, goods on consignment, and processing with supplied materials.