What is the closing inventory (stock) of finished goods of the manufacturer?

(a) £400

(b) £660

(c) £1,100

(d) £1,500

The following information applies to question.

A manufacturing company has carried out the following business transactions:

• 500 kg of raw materials has been purchased for cash at a price of £3 per kg.

• 300 kg of the raw materials has been put into production process.

• 1 kg of raw material was required to make one item of the finished product.

• The cost of labour and other expenses involved in production amounted to £2 for each item of the finished product.

• 300 items of the finished product were transferred to the finished goods store.

• 220 items of the finished product were delivered to customers.

• Each item of the finished product was sold for £8 on 2 months’ credit terms

Transcribed Image Text:

Stage 1 2 3 4 5 6 Transaction or event Purchased 500 kg of raw materials for cash at 3 per kg. 300 kg of the raw materials was put into production, 300 x 3. 300 items of the finished product were completed. 300 items of the finished product were transferred to the finished goods store. 220 items of the finished product were taken from store for delivery to customers. 220 items of finished product were sold on 2 months' credit terms. Totals at the end of the period. Cash at bank Receivables Assets Raw material. Inventory (stock) Work in progress Finished goods Ownership interest Revenue Expenses