Do wasted raw ingredients need to be included in COGS?

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Hi all,

I'm going to try and keep this simple and if I need to explain further, I will. If we are showing more raw material in inventory than actually exists on the production floor, does the excess need to be considered scrapped raw material or do we need to find a way to roll it into our COGS? This is common just due to the nature of the work and I am not talking about big spills or anything, just accumulation of raw material wasted over time. If so, how can I account for it in COGS when we may be manufacturing several different products over that time. Do we just average it into all the products over that time frame?

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4catztoomany

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Posted: 2 years ago
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