Page 11 - Cost Accounting - Ready Reckoner

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3. FSN Analysis:
Goods are classified into
Category Type
F Fast moving
S Slow moving
N Non-moving items

This analysis facilitates maintaining stock levels at appropriate quantities based
on movement of stock.

FSN Analysis uses inventory turnover ratio to know the movement of Stock.

Inventory Turnover Ratio =

If Inventory turnover ratio is high, it means Fast Moving Stock.
If Inventory turnover ratio is Zero, it means a non-moving stock.

Invoice for purchase of materials is prepared by the supplier which shall take the
following sequence:

Particulars Amount (₹)
Purchase Price = Quantity X Rate xxxx
Less: Trade discount xxx

Net Purchase Price xxxx

Add: Container Charges xxx

Add: Sales Tax xxx
Invoice Value xxxx

Add: Freight, Carriage and Insurance
xxx
Charges
Less: Credit for return of Containers xxx

Net Invoice Price xxxx