MANAGEMENT

Detailed explanation-1: -Raw materials, semi-finished goods, and finished goods are the three main categories of inventory that are accounted for in a company’s financial accounts.

Detailed explanation-2: -Some examples of finished goods are cars, furniture, clothes, and smartphones. These products have completed a company’s production cycle and are ready for sale. Keep in mind that the definition of “finished goods” can vary from company to company.

Detailed explanation-3: -Finished goods inventory is the total number of manufactured products that are available, in stock, and ready for purchase by vendors, retailers, and consumers.

Detailed explanation-4: -Ordering, holding, and shortage costs make up the three main categories of inventory-related costs. These groupings broadly separate the many different inventory costs that exist, and below we will identify and describe some examples of the different types of cost in each category.