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108,000 kg of raw materials are held in inventory at the year end. a) Calculate the cost of the raw material inventory at 31 July

108,000 kg of raw materials are held in inventory at the year end. a) Calculate the cost of the raw material inventory at 31 July 2022 based on a first in first out (FIFO) approach 2 marks Metal prices drop suddenly towards the year end, and the cost of 1 kg of metal at 31 July 2022 is now only 28p. b) State the amount of the write-down, if any, required to the above valuation of the raw material inventory. 2 marks Production costs The entity achieved its budgeted level of production for the year, being 580,000 finished units and a further 50,000 units that are 40% complete. The production costs for the period were: Raw materials Direct labour Factory overheads Distribution costs 200,000 150,000 100,000 80,000 Page 5 of 7 c) Calculate the cost of producing 1 unit of finished good. Provide your answer to the nearest pence. 2 marks Total 6 marks

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