Basic Accounting Lectures

What are stock Levels?
Every business has to maintain stocks of material (goods) which are used during the production process. Following stock levels are self-explained. Like reorder level suggests that at what level we should re order the stock. Similarly maximum or minim stock levels suggest the maximum or minimum stocks to be maintained.

Solving questions on [...]

What is Economic Order Quantity?
There are two costs attached to stock:

1) Ordering Cost : All cost which are incurred during the ordering of stock, like phone calls, transportation cost etc

2) Holding Cost : Storage costs, like rent of the building etc.

What is the Difference in Defective Goods and Spoiled Goods?

There is a fundamental difference between the two. A defective good is a good in which there is a manufacturing fault or defect, but this fault can be removed by applying additional cost called rectification cost.

Whereas in case of Spoiled goods, the goods have been spoiled [...]