Backflush accounting is a streamlined costing method designed for environments with minimal stock levels. It allocates costs retroactively to simplify accounting operations, especially suitable for Just-In-Time inventory systems.
Cost of Goods Sold (COGS) represents the direct costs attributed to the production of goods sold by a company. COGS include the cost of materials, direct labor, and manufacturing overhead.
A key financial metric representing the direct costs to an organization of supplying goods or services, used to calculate gross profit by deducting this figure from sales revenue.
Cost of Sales Adjustment (COSA) refers to an adjustment made to the trading profit of an organization due to a holding gain on the cost of sales, commonly within the framework of current-cost accounting.
Direct labour cost refers to the expenditures on wages paid to operators who are directly involved in the production of a product, service, or cost unit. It's part of the direct cost of sales and can be measured through the time spent on activities and operators' pay rates.
A ratio of financial performance that calculates gross profit as a percentage of sales, serving as a critical measure of trading success in retailing companies.
Inventory includes the raw materials, work-in-progress, and finished goods that a company has on hand at any given time. Effective inventory management is crucial for maintaining liquidity and profitability.
Understand in detail the various expenses incurred during the manufacturing process, including direct materials, direct labor, direct expenses, and manufacturing overhead.
Net profit, also known as net margin or net profit margin, represents the amount of revenue that remains after all the expenses of an organization have been subtracted from its total sales. It is a crucial measure of a company's financial performance and profitability.
A trading account, crucial in financial accounting, involves comparing the cost of sales with the revenue generated to determine the gross profit within a profit and loss account.
