Raw materials inventory of a company includes 1 Kg. of certain material purchased at Rs. 100 per Kg. The price of the material is on decline and replacement cost of the inventory at the year-end is Rs. 80 per Kg. It is possible to incorporate the material in a finished product. The conversion cost (wages and overheads) is Rs. 120. Inventory values for expected selling prices of the finished product (a) Rs. 195 (b) Rs. 230 and (c) Rs. 210.

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