Question 4 ABC Limited runs a manufacturing business that buys in materials which are then worked on to produce a product called the Duce. A major job in the cost accounting section is the pricing of materials that are issued from stores to the factory. Below are details of material movements into and out of the stores department for the previous period. Date 1 May Opening balance 60 Kg with a total cost of K900 4 May Bought 80Kg at K20 per kg 10 May Issued 100Kg 15 May Bought 100Kg at K25 per kg 20 May Issued 60kg 25 May Issued 60Kg The company currently uses FIFO method to cost all material issues from stores. The new Management Accountant is considering changing the costing system for costing material issues in view of the rising prices for material purchases. 5 Required: (a) Prepare the stores ledger card for the materials in stock that records all material movements using: (i) FIFO method [5 marks] (1) LIFO method [5 marks) Gi) Weighted average method [5 marks) (b) Explain the impact that each of the three methods in (a) above will have on: (1) The reported profit of the company for the month of May and [2 marks] (i) The reported closing stock disclosed in the Statement of Financial position at the end of May. [2 marks) (c) State one advantage that the FIFO method has over the LIFO method. [1 mark]