Iron Limited is a small manufacturing company. During the year to 31 December 2015 it has taken

Question:

Iron Limited is a small manufacturing company. During the year to 31 December 2015 it has taken into stock and issued to production the following items of raw material, known as XY1:

Required:

(a) Illustrate the following methods of pricing the issue of materials to production:

1 First-in, first-out (FIFO)

2 Continuous weighted average.

(b) Calculate the gross profit for the year using each of the above methods of pricing the issue of materials to production.

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Related Book For answer-question

Accounting For Non-Accounting Students

ISBN: 9781292128979

9th Edition

Authors: John R. Dyson, Ellie Franklin

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Question Posted: Oct 11, 2022 02:47 AM

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Iron Limited is a small manufacturing company. During the year to 31 December 2015 it has taken

Question:

Date 2015 January February April May June July October December Receipts into stock Price per unit £ 2.00 Quantity (litres) 200 500 800 900 3.00 4.00 5.00 Total value £ 400 1 500 3 200 4 500 Issues to production Quantity (litres) 100 300 400 1400

Step by Step Answer:

a Illustration of the pricing methods Firstin firstout FIFO Under the FIFO method the cost of the earliest inventory received is assigned to units sold first and the cost of the most recent inventory ...View the full answer

Accounting For Non-Accounting Students

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