DISTRIBUTION COSTS AND INVENTORY VALUES.
The article discusses the relationship of selling expenses and other distribution costs to the problem of inventory value. It has been viewed that cost affects the supply prices of commodities, particularly in the long run, but the effective cost even in this connection may be found only in the case of a limited number of marginal producers. However, in the case of the representative enterprise it is true that market price is normally sufficient to cover all of the expenses of operation, including the so-called distribution costs, and something by way of a profit margin as well. The present practice of charging distribution costs directly into operating expenses without passing them through the regular cost system and thus into inventory values, is doubtless based in part on the assumption that such costs are not subject to inventory because they occur simultaneously with the sale or after the sale has taken place. The conventional idea of accountants that in no case can certain classes of charges which enter into business operation unmistakably but in ways unobservable by physical methods be set up as deferred items is subject to revision.
- DOI
- 10.2308/tar-8592514
- Volume
- 2 (3)
- Pages
- 246-253
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref