This system is called Periodical Inventory because the cost of finished products is known only at the end of a period, usually a year, due to the physical inventory of the stocks of Materials, Finished Products and Products in Process.
It is a simplified system through which we can calculate the cost of all the manufactured goods, doing away with the practice of rigorous controls and utilization of specialized personnel. For this reason, it is widely used by small and medium industries.
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