Industrial Goods
Industrial goods are the goods or products that are used by the manufacturers to further produce products to be sold to end customer. As opposed to consumer goods, which are directly sold to the end user, industrial goods are categorized as per their uses. Industrial goods are also referred to as capital items in the balance sheets of the company because of their durability and their cost is leveled over the years. However, some industrial goods that are readily used up account in the expense category in a company’s balance sheet.
The five subcategories of industrial goods are:
Installation: Installation are industrial goods that are directly used in production of end consumer goods. Installation can be designed for specialized situations or standard use. Installations such as conveyor systems, machine tools and robotics equipments are examples of industrial goods for specialized use whereas installations such as commercial ovens, CAT scan machines are examples of industrial goods for standard use. Installations are capital items.
Accessory equipment: These are capital items but are less expensive and less durable than installations. Though most of the accessory equipments are involved indirectly in the production process some accessories such as hand tools , forklifts and desk calculators are directly involved in production.
Raw materials: These are industrial goods purchased in raw form to be later processed and sold as consumer goods. Some examples of raw materials are iron ore; crude oil, diamonds, wheat and leather. Some raw materials may directly be converted to consumer goods while others may be resold for use in other industry.
Fabricated Parts and Materials: This category of industrial good comprises of fabricated parts that are directly placed into final product without any processing. Fabricated materials however, do require processing before they are placed in the product. Industries such as auto industry use fabricated parts heavily such as batteries, sun roofs, windshields.
Industrial supplies: These types of industrial goods are frequently purchased expense category items. Some examples of these industrial goods are computer paper, light bulbs, lubrication oil and office supplies.
Filed under: Uncategorized