{"id":2826,"date":"2019-11-26T06:35:30","date_gmt":"2019-11-26T06:35:30","guid":{"rendered":"https:\/\/commerceiets.com\/?p=2826"},"modified":"2019-11-26T06:35:30","modified_gmt":"2019-11-26T06:35:30","slug":"pricing-of-materials","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/pricing-of-materials\/","title":{"rendered":"PRICING OF MATERIALS"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/commerceiets.com\/pricing-of-materials\/#PRICING_OF_MATERIALS\" title=\"PRICING OF MATERIALS\">PRICING OF MATERIALS<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/commerceiets.com\/pricing-of-materials\/#Pricing_of_materials_refers_to_valuation_of_materials_issued_by_the_stores_department_for_the_production_process\" title=\"Pricing of materials refers to valuation of materials issued by the stores department for the production process. \">Pricing of materials refers to valuation of materials issued by the stores department for the production process. <\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/commerceiets.com\/pricing-of-materials\/#1COST_PRICE_METHOD\" title=\"1.COST PRICE METHOD\">1.COST PRICE METHOD<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/commerceiets.com\/pricing-of-materials\/#2MARKET_PRICE_METHOD\" title=\"2.MARKET PRICE METHOD\">2.MARKET PRICE METHOD<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/commerceiets.com\/pricing-of-materials\/#3AVERAGE_PRICE_METHOD\" title=\"3.AVERAGE PRICE METHOD\">3.AVERAGE PRICE METHOD<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/commerceiets.com\/pricing-of-materials\/#4FIXED_PRICE_METHOD\" title=\"4.FIXED PRICE METHOD\">4.FIXED PRICE METHOD<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/commerceiets.com\/pricing-of-materials\/#5INFLATED_PRICE_METHOD\" title=\"5.INFLATED PRICE METHOD\">5.INFLATED PRICE METHOD<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1 class=\"has-text-align-center wp-block-heading\" id=\"pricing-of-materials\"><span class=\"ez-toc-section\" id=\"PRICING_OF_MATERIALS\"><\/span>PRICING OF MATERIALS<span class=\"ez-toc-section-end\"><\/span><\/h1>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"pricing-of-materials-refers-to-valuation-of-materials-issued-by-the-stores-department-for-the-production-process\"><span class=\"ez-toc-section\" id=\"Pricing_of_materials_refers_to_valuation_of_materials_issued_by_the_stores_department_for_the_production_process\"><\/span>Pricing of materials refers to valuation of materials issued by the stores department for the production process. <span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">Pricing of materials should be done by adopting the method which is suitable for nature of materials and business itself. The methods applied for pricing of materials are as follows:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"960\" height=\"720\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/11\/Slide2-5.jpg\" alt=\"METHODS OF PRICING OF MATERIALS\" class=\"wp-image-2829\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/11\/Slide2-5.jpg 960w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/11\/Slide2-5-300x225.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/11\/Slide2-5-768x576.jpg 768w\" sizes=\"(max-width: 960px) 100vw, 960px\" \/><figcaption>PRICING OF MATERIALS<\/figcaption><\/figure>\n\n\n\n<h3 class=\"has-text-align-center wp-block-heading\" id=\"1-cost-price-method\"><span class=\"ez-toc-section\" id=\"1COST_PRICE_METHOD\"><\/span>1.COST PRICE METHOD<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"has-medium-font-size\">Cost price method is widely adopted method of pricing of materials. It takes the actual cost of the materials for its valuation. The <a rel=\"noreferrer noopener\" aria-label=\"Actual cost (opens in a new tab)\" href=\"https:\/\/commerceiets.com\/types-of-cost\/\" target=\"_blank\">Actual cost<\/a> is the cost at which the material is originally purchased. The actual cost of materials include amount of:<\/p>\n\n\n\n<ul><li>Import duty<\/li><li>Sales tax<\/li><li>Commission on purchase<\/li><li>Freight<\/li><li>Carriage<\/li><li>Cartage<\/li><li>Transit insurance<\/li><li>Octroi charges<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\">The actual cost excludes the amount of:<\/p>\n\n\n\n<ul><li>Trade discount<\/li><li>Cash discount<\/li><li>Quantity discount<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\">Under this method, the materials issued can be priced on any of the following basis:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"960\" height=\"720\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/11\/Slide4-3.jpg\" alt=\"BASIS OF CHARGING COST\" class=\"wp-image-2830\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/11\/Slide4-3.jpg 960w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/11\/Slide4-3-300x225.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/11\/Slide4-3-768x576.jpg 768w\" sizes=\"(max-width: 960px) 100vw, 960px\" \/><figcaption>PRICING OF MATERIALS<\/figcaption><\/figure>\n\n\n\n<p class=\"has-medium-font-size\"><strong><em>FIRST-IN-FIRST-OUT METHOD (FIFO): <\/em><\/strong>Under this method, the materials received first are issued first. So the price paid for the earliest lot of materials in hand is taken as the basis of charging out the materials issued. This method is featured as:<\/p>\n\n\n\n<ul><li>Receipt side of stock ledger is exhausted in\nchronological order.<\/li><li>Stock in hand is valued at current or latest\npurchases.<\/li><li>Maintenance of the record of quantity and value\nof every receipt of material.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\">The <strong>advantages<\/strong> of this method are as follows:<\/p>\n\n\n\n<ul><li>It is simple to apply.<\/li><li>It follows the principles of costing as in this\nmethod the closing materials are valued at current price.<\/li><li>In this method, accounting flow and physical\nflow is the same.<\/li><li>The closing value of materials in this method is\nclose to the current market prices.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\">The <strong>disadvantages<\/strong> of this method are as follows:<\/p>\n\n\n\n<ul><li>This method involves excessive labor.<\/li><li>In times of inflationary periods, the cost as\nper FIFO method will not reflect the current market conditions.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong><em>LAST-IN-FIRST-OUT METHOD (LIFO):<\/em><\/strong> Under this method, the material received in last is issued first. The price of the latest consignment is taken as base for pricing of materials. This method requires the maintenance of record of quantity and value of every receipt of material.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">The main <strong>advantages<\/strong> of this method are:<\/p>\n\n\n\n<ul><li>This method is simple to apply.<\/li><li>It follows the costing principles.<\/li><li>The price charged reflects the current prices in\nthe market.<\/li><li>This method helps in preventing over-statement\nof profits.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\">The <strong>disadvantages<\/strong> of this method are:<\/p>\n\n\n\n<ul><li>This method involves too much clerical labor.<\/li><li>The stock may be under-valued or over-valued as\nthe closing stock shall not reflect the current market prices.<\/li><li>This pricing method does not conform to the\nphysical flow of materials from the stores.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong><em>HIGHEST-IN-FIRST-OUT METHOD (HIFO):<\/em><\/strong> Under this method, the materials in hand purchased at the highest price are deemed to be issued first. This method is featured as follows:<\/p>\n\n\n\n<ul><li>The main aim of adopting this method is to\nensure that the values of stock in hand are kept at the lowest possible prices.<\/li><li>It follows the costing principles.<\/li><li>It helps in prevention of over-valuation of\nstocks.<\/li><li>It is not very popular.<\/li><li>This method involves tedious calculations.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong><em>NEXT-IN-FIRST-OUT METHOD (NIFO):<\/em><\/strong> Under this method, issues of material are charged out at the next price i.e. the price at which order for the purchase of materials has been placed but the actual delivery of the materials has not yet been received. This method is featured as follows:<\/p>\n\n\n\n<ul><li>The aim is to price the materials at a price\nwhich is as close to market price.<\/li><li>This method is not very popular.<\/li><li>This method involves tedious calculations.<\/li><li>This method employs excessive labor.<\/li><\/ul>\n\n\n\n<h3 class=\"has-text-align-center wp-block-heading\" id=\"2-market-price-method\"><span class=\"ez-toc-section\" id=\"2MARKET_PRICE_METHOD\"><\/span>2.MARKET PRICE METHOD<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"has-medium-font-size\">Market price method takes the prevailing market price as a\nbase for valuation of materials to be issued. This method follows the principle\nof valuation of stock at latest price.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">This method has following <strong>advantages<\/strong>:<\/p>\n\n\n\n<ul><li>The price at which the material is valued\nreflects the current prices.<\/li><li>This method is suitable for application by the\ncontractors and job order manufacturers.<\/li><li>This method is simple to apply and does not\ninvolve tedious calculations.<\/li><li>The adoption of this method gives correct\nfinancial position of the concern.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\">The <strong>disadvantages <\/strong>of this method are as follows:<\/p>\n\n\n\n<ul><li>The price of materials issued may not be the\ntrue as the prevailing market price is not the real cost of materials.<\/li><li>There are fluctuations in the market price which\nmakes the issue price of materials fluctuating.<\/li><li>The adoption of this method poses a serious\nproblem relating to reconciliation of costing and financial records.<\/li><\/ul>\n\n\n\n<h3 class=\"has-text-align-center wp-block-heading\" id=\"3-average-price-method\"><span class=\"ez-toc-section\" id=\"3AVERAGE_PRICE_METHOD\"><\/span>3.AVERAGE PRICE METHOD<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"has-medium-font-size\">This method operates on the basis of calculation of\naverages. Under this method, the materials in hand are so intermingled that the\nissues of materials are priced at average cost price of materials in hand; a\nnew average is calculated whenever a fresh purchase is made.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">To calculate the average, various methods are adopted:<\/p>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/11\/Slide11-3.jpg\" alt=\"PRICING OF MATERIALS\" class=\"wp-image-2832\" width=\"840\" height=\"630\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/11\/Slide11-3.jpg 960w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/11\/Slide11-3-300x225.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/11\/Slide11-3-768x576.jpg 768w\" sizes=\"(max-width: 840px) 100vw, 840px\" \/><figcaption>PRICING OF MATERIALS<\/figcaption><\/figure>\n\n\n\n<p class=\"has-medium-font-size\"><em><strong>SIMPLE AVERAGE PRICE: <\/strong><\/em>Simple average price is the price calculated by dividing the total of purchase price of materials in hand on the date of issue by the number of prices.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">The <strong>advantages<\/strong> of this method are:<\/p>\n\n\n\n<ul><li>This method is simple in operation<\/li><li>It gives reliable results under stable prices.<\/li><li>It minimizes the variances in the cost and the\nmarket prices.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\">The <strong>disadvantages<\/strong> under this method are as follows:<\/p>\n\n\n\n<ul><li>It does not project the accurate total cost.<\/li><li>This method is unscientific in application.<\/li><li>Under-charging and over-charging of material\ncosts give inaccurate profit or loss.<\/li><li>Valuation of stock is usually incorrect under\nthis method.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\">&nbsp;<strong><em>WEIGHTED AVERAGE PRICE:<\/em><\/strong> It is the price which is calculated by dividing the cost of materials in stock from which materials to be priced could be drawn, by the total quantity of materials in the stock.<\/p>\n\n\n\n<p class=\"has-text-align-center has-pale-cyan-blue-background-color has-background has-medium-font-size\"><strong>Weighted Average Price= Total cost of materials in stock\/ Total units in stock<\/strong><\/p>\n\n\n\n<p class=\"has-medium-font-size\">The<strong> advantages<\/strong> of this method are:<\/p>\n\n\n\n<ul><li>It is simple to understand and easy to operate.<\/li><li>The results of this method are more reliable and\naccurate.<\/li><li>The total cost of materials is recovered from\nthe total production under this method.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\">The <strong>disadvantages<\/strong> of this method are:<\/p>\n\n\n\n<ul><li>This method involves tedious calculations.<\/li><li>Closing stock price does not represent the\ncurrent market prices.<\/li><li>There are chances of profit or loss because of\nover-charging and under-charging of materials costs to jobs.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong><em>PERIODIC SIMPLE AVERAGE PRICE:<\/em><\/strong> This method is also known as End of Period method and End of Month method. Under this method, valuation of material issued is based on the simple average of all prices of materials purchased during a specific period of time, say a month.<\/p>\n\n\n\n<p class=\"has-text-align-center has-pale-cyan-blue-background-color has-background has-medium-font-size\"><strong>Periodic Simple Average Issue Price= Total of prices of purchases during the period\/ No. of prices during the period.<\/strong><\/p>\n\n\n\n<p>The <strong>advantages<\/strong> of this method are:<\/p>\n\n\n\n<ul><li>This method is easier to operate and simple to\nunderstand.<\/li><li>It is suitable for large scale undertakings.<\/li><li>The average issue price representing different\nlots is more representative.<\/li><\/ul>\n\n\n\n<p>The <strong>disadvantages<\/strong> of this method are:<\/p>\n\n\n\n<ul><li>The value of closing stock does not represent\nthe current market price or cost of the product.<\/li><li>The approximation of figures under this method\nmay lead to under-absorption or over-absorption of costs.<\/li><li>There are tedious calculations involved under\nthis method.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong><em>PERIODIC WEIGHTED AVERAGE PRICE:<\/em><\/strong> It is calculated by dividing the total cost of materials purchased by the total quantity purchased. The weighted average price is calculated at the end of the year.<\/p>\n\n\n\n<p class=\"has-text-align-center has-pale-cyan-blue-background-color has-background has-medium-font-size\"><strong>Periodic Weighted Average Price= Cost of materials received\/ Quantity received.<\/strong><\/p>\n\n\n\n<p class=\"has-medium-font-size\"><strong>Advantages <\/strong>of this method are as follows:<\/p>\n\n\n\n<ul><li>The price is easy to calculate by this method.<\/li><li>This method is suitable for the industries where\nthere are wide fluctuations.<\/li><li>It can be applied with greater success in case\nof processing industries.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong>Disadvantages<\/strong> of this method are:<\/p>\n\n\n\n<ul><li>There is every possibility of under-recovery and\nover-recovery of cost of materials.<\/li><li>The calculations are very lengthy and tedious.<\/li><\/ul>\n\n\n\n<h3 class=\"has-text-align-center wp-block-heading\" id=\"4-fixed-price-method\"><span class=\"ez-toc-section\" id=\"4FIXED_PRICE_METHOD\"><\/span>4.FIXED PRICE METHOD<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"has-medium-font-size\">This method is also known as Standard Price Method. &nbsp;As per this method, the materials issued are\npriced as per the pre-determined price or fixed price. The standard price is\nset for a fixed period and all the materials issues are priced at that price\nfor a fixed term.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">The standard prices are of two types which are as follows:<\/p>\n\n\n\n<p class=\"has-medium-font-size\"><strong>Basic standard price<\/strong>\nwhich is fixed for longer period of time which is greatly helpful in future\nplanning.<\/p>\n\n\n\n<p class=\"has-medium-font-size\"><strong>Current standard\nprice<\/strong> which is fixed for a shorter period of time and can be adjusted in accordance\nwith the changed circumstances.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">&nbsp;The difference\nbetween the standard price and actual price is known as Variance.<\/p>\n\n\n\n<ul><li><strong>Actual\nprice&gt; Standard Price= Negative Variance<\/strong><\/li><li><strong>Actual\nprice&lt;Standard Price= Positive Variance<\/strong><\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong>Advantages<\/strong> of this method are:<\/p>\n\n\n\n<ul><li>This method is simple to apply and easy to use.<\/li><li>It considerably reduces the clerical work.<\/li><li>It can be used as an effective tool to initiate\neffective control over purchases.<\/li><\/ul>\n\n\n\n<p class=\"has-medium-font-size\"><strong>Disadvantages<\/strong> of this method are:<\/p>\n\n\n\n<ul><li>The fixation of standard price is a cumbersome\nprocess.<\/li><li>There exists the possibility of over-recovery\nand under-recovery of material costs.<\/li><\/ul>\n\n\n\n<h3 class=\"has-text-align-center wp-block-heading\" id=\"5-inflated-price-method\"><span class=\"ez-toc-section\" id=\"5INFLATED_PRICE_METHOD\"><\/span>5.INFLATED PRICE METHOD<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"has-medium-font-size\">This method is used when the materials are subject to normal wastage which is unavoidable. In order to recover the loss arising due to normal wastage, the material issues are priced at the higher rate known as inflated price.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/cost-accounting\/\">Cost Accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/scope-of-cost-accounting-pdf\/\">Scope of cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/elements-of-cost\/\">Elements of cost<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/types-of-cost\/\">Types of cost<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/material-control-in-cost-accounting-pdf\/\">Material control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/perpetual-inventory-system\/\">Perpetual inventory system<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/pricing-of-materials\/\">Pricing of materials<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/bin-card\/\">Bin Card<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/store-ledger\/\">Stores Ledger<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/incentive-plans\/\">Incentive plans<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/overhead\/\">Overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/accounting-treatment-of-idle-time\/\">Idle time<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/system-of-wage-payment-in-cost-accounting\/\">System of wage payment in cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-time-rate-system-and-piece-rate-system\/\">Time rate vs piece rate wage system<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-centre\/\">Cost Center<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/labor-turnover\/\">Labour Turnover<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/difference-between-management-accounting-and-cost-accounting\/\">Difference between management accounting and cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/allocation-and-apportionment-of-overheads\/\">Allocation and apportionment of overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-allocation-and-apportionment-of-overheads\/\">Allocation vs Apportionment of overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/absorption-of-overheads\/\">Absorption of overheads<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/over-absorption-and-under-absorption-of-overheads\/\">Over absorption and under absorption of overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/activity-based-costing\/\">Activity based costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-traditional-costing-and-activity-based-costing\/\">Traditional costing vs ABC system<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/reconciliation-of-accounts\/\">Reconciliation of accounts<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/unit-costing\/\">Unit costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-sheet-format\/\">Cost sheet format<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-sheet-vs-production-account\/\">Cost sheet vs production sheet<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/job-costing\/\">Job costing<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/batch-costing\/\">Batch Costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-job-costing-and-batch-costing\/\">job costing vs batch costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/contract-costing\/\">Contract costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-job-costing-and-contract-costing\/\">Job Costing vs Contract costing<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/process-costing\/\">Process Costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/process-costing-vs-job-costing\/\">Process costing vs job costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/joint-products\/\">Joint products<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/by-products\/\">By Product&nbsp;<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/equivalent-production\/\">Equivalent production<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/marginal-costing\/\">Marginal costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/applications-of-marginal-costing\/\">Application of marginal costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-volume-profit-analysis\/\">Cost volume profit analysis<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/tools-and-techniques-of-marginal-costing\/\">Tools and techniques of marginal costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/budget\/\">Budget<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/break-even-point\/\">Break even point<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/process-of-budgetary-control\/\">Process of budgetary control<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/explain-the-advantages-and-limitations-of-budgetary-control\/\">Advantages and limitations of budgetary control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/budgetary-control\/\">Budgetary Control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/zero-base-budgeting\/\">Zero base budgeting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/standard-costing\/\">Standard Costing<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/variance-analysis\/\">Variance Analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-standard-costing-and-budgetary-control\/\">Standard costing vs budgetary control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-management-accounting-and-cost-accounting\/\">Management accounting vs cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-financial-accounting-management-accounting-and-cost-accounting\/\">Cost accounting vs financial accounting<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/\" target=\"_blank\" rel=\"noreferrer noopener\">CONNECT ON LINKEDIN<\/a><\/div>\n<\/div>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-cropped-Presentation-resize-1.jpg\" alt=\"PRICING OF MATERIALS\" class=\"wp-image-4836\" width=\"515\" height=\"153\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-cropped-Presentation-resize-1.jpg 512w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-cropped-Presentation-resize-1-300x89.jpg 300w\" sizes=\"(max-width: 515px) 100vw, 515px\" \/><figcaption>PRICING OF MATERIALS<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>PRICING OF MATERIALS Pricing of materials refers to valuation of materials issued by the stores department for the production process. Pricing of materials should be done by adopting the method which is suitable for nature of materials and business itself. The methods applied for pricing of materials are as follows: 1.COST PRICE METHOD Cost price&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/pricing-of-materials\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;PRICING OF MATERIALS&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":2828,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[187],"tags":[198,199,200,201],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/2826"}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=2826"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/2826\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/2828"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=2826"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=2826"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=2826"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}