Flofoam is a manufacturer of specialist lightweight padding for seating in passenger aircraft. As a result of the particular machinery required, Flofoam manufactures and sells only this one product. Raw materials are purchased in lots of 1,000 tonnes at the commencement of each week throughout the year ended 31 March 2013. The price per tonne was \(£ 100\) for the first nine months and \(£ 130\) thereafter. Transport costs to the factory amount to \(£ 20\) per tonne and customs duty of \(£ 4\) per tonne was paid throughout the year. Due to the volume of purchases, the supplier of raw materials gave a discount of \(£ 8\) per tonne from 1 October 2012 onwards.

Direct costs of processing amount to \(£ 30\) per tonne and fixed production overheads have been calculated at \(£ 27\) per tonne on the basis of normal levels of activity.

Each tonne of raw material produces one tonne of finished goods.

Company general administration overheads amount to \(£ 5,000\) per week and selling costs are estimated at \(£ 18\) per tonne.

At the end of the year there were \(£ 4,000\) tonnes of raw material and 1,500 tonnes of finished goods.

The selling price to customers per tonne was \(£ 300\) throughout the year. Opening inventory equalled \(£ 640,000\) in total, made up of 3,000 tonnes of raw materials and 500 tonnes of finished goods.

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(a) Calculate the inventory value of raw materials and finished goods as at 31 March 2013. Assume the FIFO method is used.

(b) Calculate the gross profit for the year to 31 March 2013 assuming an operational year of 52 weeks.