The following information relates to inventory held at the year-end:

Item A Item B

£ £

Cost 65 35

Selling price 90 44

Cost of modification required to enable sale 16 n/a

Marketing and distribution costs 20 10

The modification costs required for item A arose because of changes requested by the customer and the customer has agreed to pay for half of the additional cost. Item B can be transferred to another department and incorporated into a product that will be sold for a significant profit. What is the total amount to be included in closing inventory for these 2 items?

A. £88

B. £89

C. £96

D. £97

Answer rating: 100% (QA)

Answer Ans As per IAS 2 Inventory Valuation requires inventoryFinished goods to be measured at lower ... View the full answer