b) Neville has only two items of inventory on hand at its reporting date. Item 1 – Materials costing R24,000 bought for processing and assembly for a customer under a ‘one off’ order which is expected to produce a high profit margin. Since buying this material, the cost price has fallen to R20,000. Item 2 – A machine constructed for another customer for a contracted price of R36,000. This has recently been completed at a cost of R33,600. It has now been discovered that, in order to meet certain health and safety regulations, modifications at an extra cost of R8,400 will be required. The customer has agreed to meet half the extra cost. Calculate the total value of these two items of inventory in the statement of financial position. (4 marks)

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Total value of these two items of inventory 24000 ... View the full answer