Which of the following can not be included as part of the cost of an item of
property, plant and equipment?

a.

Major overhaul costs

b.

Delivery costs

c.

Refundable purchase taxes

d.

Modifications to improve capacity

Tate Limited uses a number of types of raw materials in its production process.

It has 8,000 units of Raw Material G on hand at 31 December 2019.

During 2019, it had the following opening inventory and purchases of

Raw Material G.

units

total cost

Opening inventory

1,500

15,000

Purchase 1 February

10,000

110,000

Purchase 1 May

4,000

36,000

Purchase 1 November

7,000

56,000

Tate Limited values Raw Material G using the First In First Out

Cost method. On this basis, what is the cost of the closing inventory

of Raw Material G at 31 December 2019?

Purple Limited is a manufacturing business making one product. Its finished

goods require the following inputs:

Labour

2 hours at

30

per hour

Production overheads

15

per unit

Raw material (1 unit)

20

per unit

The raw materials cost is based on the set price agreed with suppliers which

has not changed in a number of years.

At 31 December 2019, Purple Limited had 1,000 units of the finished goods in

stock and 500 units of the raw material.

The expected sales price of the finished goods is 115 with delivery costs per

unit of 7. The rate of labour per hour is due to increase to 40 per hour from

1 January 2020.

What is the total figure for closing inventory that Purple Limited should reflect

in its accounts for the year ended 31 December 2019?

Which of the following can not be included when calculating the cost
of inventories under IAS2?

	a.	Handling costs
	b.	Refundable taxes
	c.	Normal production overheads
	d.	Delivery Costs of Materials