Finance controlling of Material costs

Understand the typical production plant layout and material movements from inbound warehouse and semi-finished production to packaging, finished goods, and outbound distribution.

Describe the confectionery plant structure and layout, including inbound raw materials warehouse, nut processing, two production lines for Flint and Step, packaging, and outbound docks for distribution.

Apply IFRS-based accounting concepts used in this course, while noting potential differences with local standards. Combine instruction on inventory and stock measurement with your country’s legislation for accurate financial reporting.

Explore material types in accounting, from raw materials and packaging to finished goods, semi-finished products, consumables, spare parts, and work in progress.

Learn how a bill of materials (BOM) lists exact quantities of ingredients to produce a specific product, and how losses can affect BOM totals for finished and semi-finished goods.

Explore the list of seven materials for the chocolate plant, from raw peanuts to the fried peanut semi-finished product, and note the standard material costs concept.

Explore the bill of materials for chocolate products, comparing standard and actual recipes and their alternatives across 2022–2023, and assess financial impact using standard costing and variance analysis.

Follow the start-up of a nut plant's first production run, moving raw peanuts through the oven and fryer, then filtering, drying, and mixing toward semi-finished fried peanuts for Flint.

Follow the start-up Fint line as it processes caramel with fried peanuts through cutting, coating with chocolate, cooling, and packaging for dispatch.

Explore how material movements affect financial results across reception, internal movement, consumption, production, dispatch, and adjustments like right-offs and stock takes.

Learn the seven material movement types across inbound, production locations, and not planned locations—receptions, internal movements, consumption, goods production, stocktake, write-offs—and how they affect inventory value and revenue.

Compute closing stock by tracking opening stock, inflows, and outflows, assign a monetary value to material quantities, and use closing stock for slow moving provisions and low commission provisions.

Use pivot tables in Excel to analyze material movements, detect anomalies, compare system data with physical stock, track monthly evolution, and identify data authors to understand postings and correct anomalies.

Learn how factory IT/IS systems shape material cost control by linking a reporting system with a factory management system, and manage data transfers, frequency, and triggers.

Explore standard costing, standard material costs, and standard prices; compare planned versus actual costs and analyze quantity and price variances to measure efficiency.

Explore how standard costing links the bill of materials to standard material costs for a chocolate factory, including energy, labour, overheads, and activity-based costing allocation methods.

Explain standard material cost calculation for chocolate production, linking BOM, requirements, and standard price to derive per-unit costs, with 2023 changes and historical pricing basis.

Analyze finished goods sales by examining volumes, selling prices, and four-month revenue totaling 21,000, using a pivot table of dispatched materials to reveal price effects and volume elasticity.

Understand seasonality to optimize inventory, cash flow, capacity planning, and pre-build stock, while analyzing top customers, pareto-driven product mix, and risks from slow-moving inventory or write-offs.

Analyze the chocolate factory's purchasing activity with a dynamic pivot table, compare actual prices to the standard price, and calculate purchasing price variance (PPV) within the standard costing framework.

Identify the main materials driving purchases, map suppliers, and manage currency risk, lead times, and inventory to improve cost control and cash flow through forecasting and variance analysis.

Learn how finance controllers analyze material purchases with pivot table data, allocate costs from invoices, broker and customs fees, and logistics, and investigate supplier changes and price trends.

Apply the matching principle in accrual accounting to align expenses with earned revenue, as the chocolate factory’s October shows zero raw material costs when no revenue is earned.

Explore how the matching principle links raw material reception, consumption, production, and dispatches to standard costs, balancing expenses with assets and explaining PPV and stock evaluation.

Explore write-off costs for raw materials, semi-finished, and finished goods, and how finance uses batch data and best before dates to protect the profit and loss statement.

Explore periodical stock takes, their types and scope—from complete to selective—driven by legal or voluntary reasons, with cycle counts, blind counting, and A/B/C material grouping.

This lecture explains how IAS 2 prescribes valuing inventories at the lower of cost and net realizable value, outlining cost of purchase and restating standard cost to cost of purchase.

Learn stock revaluation under IAS 2, adjusting inventory from standard costs to actual prices using FIFO or weighted average, including raw materials and finished goods via BOM.

Perform a stock re-evaluation for a chocolate plant, updating closing stock with re-stated costs, using actual purchase prices, standard costs, and PPV to ensure proper matching in the P&L.

Update month-end revaluation reveals a new standard cost, causing a minus 20 adjustment as end-of-month quantity multiplies the December–November standard cost difference, altering the P&L.

Explore the locom provision and net realizable value under IAS 2, applying historical selling prices to adjust inventory and recognize impairment losses, with automatic reversals when stock declines.

Apply a slow moving inventory provision policy under international standards to estimate future inflows, classify stock, and compute accruals and pnl impact with a chocolate factory example.

Explore stock valuation under the lower of cost or net realizable value, compare cost of purchase with net realizable value, and examine reevaluation and slow-moving reserve implications.