Costing - Study Mode

[#871] "Calculate the value of closing stock from the following according to FIFO method: 1st January, 20XX: Opening balance: 50 units @ Rs 4 Receipts: 5th January, 20XX: 100 units @ Rs 5 12th January, 20XX: 200 units @ Rs 4.50 Issues: 2nd January, 20XX: 30 units 18th January, 20XX: 150 units"
Correct Answer

(A) Rs. 765

Explanation

Solution: Calculation of Closing Stock: 1st January, 20XX: Opening balance: 50 units @ Rs 4 = 50 × 4 = Rs. 200 Issue: 2nd January, 20XX: 30 units = 30 × 4 = Rs. 120 Remaining Stock = (50 - 30) × 4 = Rs. 80 Reciept: 5th January, 20XX: 100 units @ Rs 5 = 100 × 5 = Rs. 500 Reciept: 12th January, 20XX: 200 units @ Rs 4.50 = 200 × 4.5 = Rs. 900 Remaining Stock = Rs. 80 + Rs. 500 + Rs. 900 = Rs. 1480 Issue: 18th January, 20XX: 150 units = (20 × 4) + (100 × 5) + (30 × 4.5) = Rs. 80 + Rs. 500 + Rs. 135 = Rs. 715 Remaining Stock = (200 - 30) × 4.5 = Rs. 765.

[#872] "Calculate the value of closing stock from the following according to LIFO method: 1st January, 20XX: Opening balance: 50 units @ Rs 4 Receipts: 5th January, 20XX: 100 units @ Rs 5 12th January, 20XX: 200 units @ Rs 4.50 Issues: 2nd January, 20XX: 30 units 18th January, 20XX: 150 units"
Correct Answer

(B) Rs. 805

Explanation

Solution: Calculation of Closing Stock: 1st January, 20XX: Opening balance: 50 units @ Rs 4 = 50 × 4 = Rs. 200 Issue: 2nd January, 20XX: 30 units = 30 × 4 = Rs. 120 Remaining Stock = (50 - 30) × 4 = Rs. 80 Reciept: 5th January, 20XX: 100 units @ Rs 5 = 100 × 5 = Rs. 500 Reciept: 12th January, 20XX: 200 units @ Rs 4.50 = 200 × 4.5 = Rs. 900 Remaining Stock = Rs. 80 + Rs. 500 + Rs. 900 = Rs. 1480 Issue: 18th January, 20XX: 150 units = (150 × 4.5) = Rs. 675 Remaining Stock = (50 × 4.5) + (100 × 5) + (20 × 4) = Rs. 805.

[#873] "Calculate the value of closing stock from the following according to Weighted Average method: 1st January, 20XX: Opening balance: 50 units @ Rs 4 Receipts: 5th January, 20XX: 100 units @ Rs 5 12th January, 20XX: 200 units @ Rs 450 Issues: 2nd January, 20XX: 30 units 18th January, 20XX: 150 units"
Correct Answer

(C) Rs. 786

[#874] Cost of abnormal wastage is:
Correct Answer

(B) Charged to the profit & loss account

Explanation

Solution: Cost of abnormal wastage is charged to the profit & loss account. It is in excess of the standard percentage of wastage set up to account for the normal wastage. The cost of abnormal waste should be excluded from the total cost and charged to Costing Profit and Loss Account. If any value is realized from the waste, the Process Account concerned may be credited.

[#875] The purchase of machinery by issuing long-term notes payable should be reported as a
Correct Answer

(A) non-cash investing and financing activity