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Standard Cost Change - Classified Parts
Standard Cost Change - Classified Parts
A Standard Cost Change journal entry must be recorded to adjust the value of inventory in stock to reflect a change in standard cost for a given item in a given warehouse. The adjustment is calculated based on the beginning inventory for the period in which the cost change occurs. Transactions occurring since the beginning of the period will be valued at the new standard.
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500.
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units in inventory at beginning of period
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10.0000000
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accounting cost per unit at beginning of period
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12.0000000
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accounting cost per unit at end of period
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DR
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Inventory
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1000.00
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CR Standard Cost Change - Classified Parts
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1000.00
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This amount is calculated as the change in cost multiplied by the beginning inventory, or (12.00 - 10.00) X 500.