The following transactions of Berain Manufacturers, which uses the perpetual inventory system, took place during February 20224 in respect of a part used in production:

February 01Stock on hand600 units @ R34 per unit08Issued to production420 units15Purchased from supplier1800 units @R35.50 per unit16Issued to production700 Units17Returned to supplier (purchased on 15 February 2024)120 Units26issued to production800 units

Using the first-in-first-out (FIFO) method, calculate the value of closing inventory as at
February 2024.

QUESTION TWO.

The following information was extracted from the accounting records of Hilton Manufacturers
for the year ended September 2024:

UNITSInventory at the beginning of the year/ZeroProduction for the year28 500Sales for the year24 000Selling price per unitR82 RDirect Materials cost per unit22Direct Labour cost per unit11Variable Manufacturing overheads per unit7Variable selling and administrative cost per unit5Fixed manufacturing overhead cost274 000Fixed selling and administrative cost95 000

The company utilises the first-in first-out method of inventory valuation.
REQUIRED:
(Round of two decimal places)
2.1 Prepare the Income Statement using the Marginal Cost method.
2.2 Prepare the Income Statement using the Absorption Costing method.

Answer rating: 100% (QA)

Question One FIFO Inventory Valuation Calculate the cost of the units issued to production on February 1 420 units Cost of units issued on February 1 420 units R34 per unit R14280 Calculate the cost o... View the full answer