Raw Materials Definition & Example - InvestingAnswers
Aug 12, 2020 · Raw materials determine the quality and cost of producing an item. Many raw materials are commodities that trade on the futures market. For many companies, acquiring raw materials at a good price makes the difference between having a profitable year and having an unprofitable year. Raw materials may be considered unfinished goods and thus ...
Raw Materials - Canada Commons
Oct 16, 2024 · A raw material, also known as a feedstock, unprocessed material, or primary commodity, is a basic material that is used to produce goods, finished products, energy, or intermediate materials that are feedstock for future finished products. As feedstock, the term connotes these materials are bottleneck assets and are required to produce other ...
Inventory | Examples & Definition - InvestingAnswers
May 17, 2021 · 1. Raw Material Inventory. The raw material inventory is at the beginning of the supply chain. These are the materials the products will be created from. For example, steel and rubber are used to produce vehicles while textiles and wood are the raw material inventory used to produce furniture. 2.
COGS - Cost of Goods Sold Definition - InvestingAnswers
Sep 29, 2020 · If Company XYZ's raw materials prices never changed, it might be practical for Company XYZ to calculate total cost of goods sold by multiplying $17 by the number of eyeglasses sold in a period. However, raw materials prices frequently do change, and when Company XYZ sells a pair of eyeglasses, it must determine exactly which materials it was ...
Economies of Scale Definition & Example - InvestingAnswers
Aug 28, 2020 · Although economies of scale are often an incentive to expand production, the creation and manufacture of new products often turns out to be less efficient than expected. The need for additional managerial expertise or personnel, higher raw materials costs, a reduction in competitive focus, and the need for additional facilities can actually ...
Commodity | Meaning & Example - InvestingAnswers
May 12, 2021 · There are three main categories of commodities -- agriculture, energy, and metals. Commodities that fall under the agriculture category include foodstuffs like sugar, grains, livestock, and raw materials such as cotton. Energy commodities include natural gas and crude oil, whereas metals include mined materials such as gold and silver.
Just In Time | JIT | Definition & Example - InvestingAnswers
Apr 23, 2021 · As raw materials arrive, the factory produces goods that are in demand and can immediately move down the line to distributors, retail outlets, and (ultimately) the end consumer. JIT Logistics Management. In logistics, just in time inventory management focuses on reducing waste while choosing the most efficient methods for moving goods.
Backflush Costing Definition & Example - InvestingAnswers
Sep 29, 2020 · Backflush Costing Example. For example, let's assume that Company XYZ manufactures widgets. It has a variety of choices in how it handles obtaining and recording the costs of its raw materials and labor. For example, it could order a year's worth of widget parts every January and warehouse them for use during the next 12 months of widget ...
Factors of Production Definition & Example - InvestingAnswers
Oct 1, 2019 · Land, for example, provides raw materials such as lumber, minerals and metals. Labor represents the people and skills necessary to manipulate, process, distribute, market and handle raw materials as well as finished goods and services.
Gross Profit Margin | Formula & Definition - InvestingAnswers
Mar 4, 2021 · Gross profit margin is a measure of a company’s profitability, calculated as the gross profit as a percentage of revenue. Gross profit is the amount remaining after deducting the cost of goods sold (COGS) or direct costs of earning revenue from revenue. Note that the cost of goods sold is a measure of the direct costs required to produce a ...