Chestnut plc is a manufacturer and has incurred the following costs in relation to a finished unit
Fantastic news! We've Found the answer you've been seeking!
Question:
Chestnut plc is a manufacturer and has incurred the following costs in relation to a finished unit of inventory:
| |
Raw materials | 1.50 |
Import duties | 0.40 |
Manufacturing labour | 1.30 |
Recoverable sales tax on raw materials (VAT) | 0.20 |
Storage costs of completed unit | 0.05 |
Production overheads (per unit) | 0.25 |
An abnormal production problem with the first batch of items produced resulted in 10p of the raw materials for each unit being wasted.
At what cost should Chestnut plc value the inventory in the Statement of financial position?
a.
None of the answers are correct
b.
3.45/unit
c.
3.55/ unit
d.
3.35/ unit
Posted Date: