The following are the transactions in respect of purchase and issue of components forming part of an assembly of a product manufactured by a firm which requires to update its cost of production, very often for bidding tenders and finalising cost plus contracts.

The stock on January 1, 2007 was 5,000 Nos valued at Rs. 1.10 each. State the method you would adopt in pricing the issue of components giving reasons. What value would be placed on stocks as on March 31 which happens to be the financial year-end and how would you treat the difference in value if any, on the stock account?

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Date 2007 January February March Quantity (in Nos) 5 11 1 18 26 8 17 28 1,000 2,000 1,500 2,400 1,000 1,000 1,500 2,000 Particulars purchased at Rs 1.20 each issued purchased Rs 1.30 each issued issued purchased at Rs 1.40 each purchased at Rs 1.30 each issued