(a) Identify the circumstances in which a cost formula may be used to establish the cost of inventories.(b) A company's inventories at 30 April 2024 include 11,000kg of a chemical which is utilised in the company's manufacturing processes. Purchases and issues of this chemical during the year to 30 April 2024 were as follows:

Calculate the cost of the company's inventory of the chemical at 30 April 2024 using each of the following cost formulas:(i) First-in, first-out (FIFO)(ii) Weighted average cost (AVCO).

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May 2023 June 2023 August 2023 September 2023 October 2023 January 2024 February 2024 Opening inventory Issued to production Purchased Issued to production Issued to production Purchased Issued to production Number of kg 32,000 25,000 15,000 12,000 5,000 10,000 4,000 Cost per kg £7.50 £8.75 £9.50