Question
Bore Limited manufactures high technology protective clothing. At 30 September 2020, the company had 1 million protective uniforms in inventory, equivalent to one quarters production.
Bore Limited manufactures high technology protective clothing. At 30 September 2020, the company had 1 million protective uniforms in inventory, equivalent to one quarters production. The uniforms cost 700 each to produce.
The following information is available regarding this inventory:
(i) In the last quarter of 2020, the demand for the company's product dropped because of cheaper imports from Hong Kong flooding the market. It is expected that each uniform can now be sold for only 600
(ii) Also, during the last quarter, the cutting machines used in the manufacture of the uniforms had been set incorrectly and 150 million more cloth by way of abnormal wastage was used in production than would normally have been the case
(iii) In order for the inventory of uniforms to be sold, the uniforms will need to be finished and transported. Costs per uniform will be 6 and 4 respectively
What will be the value of Bore Limiteds inventory of uniforms in the financial statements at 30 September 2020?
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