Question

c) During its first year of operations, a manufacturing company produced 40,000 units of finished goods. This came short of its expected normal production level of 50,000 units. The production costs incurred during the year included: Direct labour costs of £200,000 Direct material costs of £300,000 Overhead costs of £400,000 As at the end of the accounting year, there were 10,000 units of finished goods in stock. Calculate the value of the company's finished goods inventory as at the end of the accounting year, clearly explaining your workings and rationale.
can someone solve this for me asap please as i have the exam in one day

Answer 1

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Particulars units cost sheet of a company for the year ended cost per Total cost unit (€) - Direct material 40,000 7.5 309000 40,000 200000 direct labour 125 509,000 400,000 prime cost Add: overhead cost cost of production Add: Finished Goods 40,000 40,000 10 40,000 | 22.5 a 900,000 - lopening) 2 25,000 Less: Finished Goods 10,000 22.5 closing) cost of production | 30,000 | 22.5 of goods sold T 675,000 there fore colt of Finished goods inventory at the end of the year (closing) is 10,000 units @ 225 is £225,000 Ics Scanned with CamScanner