Accounting And Controlling Of Material Cost.

Q17. Discuss reasons for accounting and controlling of material cost.
Ans. Following reasons for accounting and controlling of material cost:

  1.  Minimum price paid for material.
  2. Exact specification of material is necessary otherwise is high quality of goods is purchased then cost will be high, and if low quality of goods is purchased then quality of finished goods will be poor.
  3. No interruption in production for want of material.
  4. No overstocking in production for want of material.
  5. Minimum shortage and losses during storage of goods.
  6. Minimum shortage and losses during production of goods.

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