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5(a) RAJASTHALI Ltd. manufactures a product OM using a raw material Mi.The company took Bank Overdraft at an interest rate of 15% p.a. specifically for
5(a) RAJASTHALI Ltd. manufactures a product OM using a raw material Mi.The company took Bank Overdraft at an interest rate of 15% p.a. specifically for the purpose of purchasing 10,000 kg. of material M1 at 100 per kg. The purchase price includes GST 10 per kg., in respect of which full credit is admissible. Freight, loading and unloading charges incurred amounted to 40,800. Interest on such Bank Overdraft amounted to * 25,000. Normal Transit Loss is 2%. The company actually received 9,760 kg. and consumed 9,500 kg. One unit of Finished product requires five units of Raw Material. Direct Labour Cost amounted to 2,28,000,Direct Overheads Cost amounted to 57,000. Total Fixed Overheads for the year were * 1,20,000 on normal capacity of 20,000 units of Finished Goods. During the year Sales of product OM were * 7,50,000 @ 750.There were no opening inventories. With reference to AS 2 "Valuation of Inventory", Calculate the amount of Abnormal Loss (if any), Closing Inventory of Finished Goods and Raw Material if (1) Finished units can be sold @ 800 subject to payment of 10% brokerage on selling price., Replacement Cost of Raw Material is 90 per kg (ii)Finished units can be sold @
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