We would like to illustrate our understanding of the topic researched by giving examples of its application in a real business. We have chosen the business of manufacturing ajinomoto. An example of a real business is AJINOMOTO (MALAYSIA) BERHAD. Ajinomoto is the world’s largest manufacturer of aspartame, sold the trade name Aminosweet.It is acquired its aspartame business in 2000 from Monsanto for US$67 million. There are few types of inventories in an ajinomoto manufacturing business :(a) Raw materials – these are components that are purchased from suppliers, such as garlic, chili flakes and corn syrup ; (b) Work-in-progress – these are the partly-completed products in the various stages of manufacturing process, such as sugar cane harvested from the plantation, then extract liquid from sugar cane, fermentation process is produced, crystallization process is happened ; (c) Finished good – these are the final ajinomoto products, such as processed foods, beverages, amino acids, pharmaceuticals and specialty chemicals ;For example, the list company that we had chosen is Ajinomoto (Malaysia) Berhad. Ajinomoto is the consumable stores. At the end of production day on 31 March 2014, assume that the total cost of inventories recognised as an expense during the financial year amounted to RM243,215,462 for the year ended 2014 and RM237,066,609 for the year ended 2013. At the end of
production day on 30 September 2010, the Finance Manager will gather a team of supervisors to assist him in counting the quantity of chocolate crumbs inventory. Assume that the total quantity counted is 2,854 kg.
The Finance Manager can find out the cost of chocolate crumbs from the computer system. The cost of chocolate crumbs is the total of costs of raw materials, costs of conversion and other costs incurred in bringing these chocolate crumbs to their present location and condition. All these costs are assigned on the FIFO (first in, first out) method because the...
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