Compare the Perpetual Inventory Control System and the Periodic Inventory

question 103

Essay

Compare the perpetual inventory control system and the periodic inventory control system. Which system provides better information for inventory management?

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Definitions:

Prime Cost

Direct materials cost plus direct labor cost.

Cost Of Goods Manufactured

The total expense incurred to produce goods over a specific period, including labor, materials, and overhead.

Gross Margin

The difference between sales revenue and the cost of goods sold, indicating the financial health of a company's core activities.

Finished Goods Inventory

The stock of completed products that are ready to be sold but have not yet been purchased by customers.