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Inventory

Forums › ACCA Forums › ACCA FA Financial Accounting Forums › Inventory

  • This topic has 5 replies, 4 voices, and was last updated 3 years ago by jcwwheeler.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • September 21, 2014 at 10:45 am #195770
    Mun
    Member
    • Topics: 3
    • Replies: 4
    • ☆

    Hi,sir.

    I have a question want to ask .For the inventory right,

    The question is inventory movements for product X during the last quarter were as follows:

    January. Purchases 10 items at $19.80 each

    February. Sales 10 items at $30 each

    March. Purchases 20 items at $24.50 each
    Sales 5 items at $30 each

    Opening inventory at 1 January was 6 items valued at $15 each

    Gross profit for the quarter ,using the weighted average cost method,would be:

    Answer:155

    How to do this kind of question.

    Kindly reply,

    Thank you.

    September 21, 2014 at 5:42 pm #195793
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54701
    • ☆☆☆☆☆

    First you need to watch our free lecture on Inventories – in there I explain with an example how to calculate the value of the closing inventory using the average method.

    Once you have calculated the value of the closing inventory then there should be no problem.
    You can calculate the total sales ((10 x $30) + (5 x $30))
    You can calculate the total purchases ((10 x $19.80) + (20 x $24.50))
    You know the opening inventory (6 x $15); and you will have calculated the closing inventory.

    So the cost of sales will be opening inventory + purchases – closing inventory.

    And the gross profit will be sales – cost of sales.

    Hope that helps 🙂

    September 21, 2014 at 11:12 pm #195815
    Mun
    Member
    • Topics: 3
    • Replies: 4
    • ☆

    Okay.i will try to watch that.thanks for your reply.it helps me a lot.

    September 22, 2014 at 6:31 am #195828
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54701
    • ☆☆☆☆☆

    You are welcome 🙂

    March 10, 2022 at 12:20 pm #650843
    leondina
    Participant
    • Topics: 0
    • Replies: 1
    • ☆

    I still don’t get the 155

    March 26, 2022 at 8:56 pm #651964
    jcwwheeler
    Participant
    • Topics: 1
    • Replies: 3
    • ☆

    Did anyone else get £83.85 GP after this question?

    I can’t see where the £155 comes from?

  • Author
    Posts
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