$(5$ Marks$)$

$7.$ From the following information relating to Process $1$ in March, calculate the cost of finished output in the month and the value of the closing inventory, using the FIFO cost valuation method:

Opening inventory on $1$ March: $3,000$ units

$100\%$ complete for direct materials

$30\%$ complete for conversion costs

Cost $$13,570(=$ direct materials $$12,600+$ conversion costs $$970)$

Costs incurred during March:

Direct materials: $7,000$ units input, cost $$28,000$ Conversion costs: $$17,430$

Completed units in the month: $8,000$ units

Closing inventory: $2,000$ units $100\%$ complete for direct materials and $60\%$ completefor conversion costs.