What is Ingredient Method of Accounting?

KB01884. What is IMoA?
Question: What is Ingredient Method of Accounting?
Answer:
Ingredient Method of Accounting is supposed to be used with the following Product Categories: chicken, deli, food service, fresh baked pizza, convection oven products, fountain drink – cold, hot drinks, and so on.

With this method merchandise additions are made at cost value and no retail value. They are extended to a retail value as the other store products. Retail value is added to the retail book inventory via price change after the item is sold. The retail value is determined by the related department sales from the closing register tape.

The purpose of Ingredient Method of Accounting on Inventory is to identify the income for the items that are included in departments and categories set up as ingredient method of accounting, and to calculate the profit margin by department and category they are included into.

C-Store Office uses Ingredient Method of Accounting to calculate GPM for a selected department and category. It is commonly used for prepared items such as coffee, fountain drinks, or deli.  The department and category will only contain the PLU items that are sold (retail) and the ingredient items that are used to sell those PLUs (cost). C-Store Office uses a weighted average calculation to blend the cost/retail over a given period to calculate GPM.


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