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    lt110705's Avatar
    lt110705 Posts: 1, Reputation: 1
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    #1

    Sep 9, 2009, 10:57 PM
    Calculate ending raw material inventory
    How do I calculate ending raw material inventory?
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Sep 10, 2009, 01:40 AM

    The same way you calculate an ending balance for any account, by looking at the debits & credits.

    But you need to know the "flow" of these accounts first. Raw material is almost exactly the same as merchandise inventory. The only difference is that instead of coming out because it's sold, it's coming out because it's being put into production.

    So purchases of raw materials adds to the balance and putting it into production reduces the balance.

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