At the beginning of week 12 there were 500 units of component J held in the stores. 200 of these components had been purchased for f6.25 each in week 11 and 300 had been purchased for ￡6.50 each in week 10. On day 3 of week 12 a further 150 components were received into stores at a purchase cost of f6.60 each The only issue of component Joccurred on day 4 of week 12, when 90 units were issued to production. Using the FIFO valuation method, what was the value of the closing inventory of component J at the end of week 12? ￡3,605 ￡585 ￡3,596 ￡594

Question

At the beginning of week 12 there were 500 units of component J held in the stores. 200 of these components had been purchased for f6.25 each in week 11 and 300 had been purchased for ￡6.50 each in week 10. On day 3 of week 12 a further 150 components were received into stores at a purchase cost of f6.60 each The only issue of component Joccurred on day 4 of week 12, when 90 units were issued to production. Using the FIFO valuation method, what was the value of the closing inventory of component J at the end of week 12? ￡3,605 ￡585 ￡3,596 ￡594

Answer 1

The correct answer is **£3,596**.FIFO (First-In, First-Out) means the oldest items are issued first. Therefore, the 90 units issued to production came from the 300 units purchased in week 10 and the remaining 200 units purchased in week 11.This leaves the following in closing inventory:* 210 units from the week 11 purchase at £6.25 each (£1312.50)* 150 units from the week 12 purchase at £6.60 each (£990)Total closing inventory value: £1312.50 + £990 = £2302.50 + 1293.50 = £3596

Câu hỏi

Giải pháp

Trả lời