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I’m totally confused that its says that raw material purchases are on one month credit and production takes place a month before then how come the raw material purchase value of January is that of Januarys sales units itself !
What you sell in January must have been produced the month before – i.e. in December.
If you pay for the material one month later, then what is bought in December will be paid for in January.
(You can find my free lectures working through all the December 2014 exam questions by going to the main Paper F9 page and choosing “Revision Kit Live”. )
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