Inventory valuation - receipt from sub contractor
This query is : Resolved
04 August 2011
Had one doubt...
I sent 100 units of Raw Material (of Rs. 20 Each totaling to Rs. 2000) to sub contractor. Sub contractor charged Rs.50 for doing the processing work. Now i brought this material from sub contractor to my stores and i borne the freight of Rs.25.
So i wanted to know.. At what value i should value the new stock (after processing)..
Will it be valued @ Rs. 2050 (i.e Rs.2000 of Raw Material + Processing cost of Rs.50) or @ Rs.2075 (i.e Rs.2000 of Raw Material + Processing cost of Rs.50 + transport cost of Rs.25)...
I tried searching AS-2 also. But i didn't got relevant point related to sub-contracting.
Please reply at ur earliest.
I sent 100 units of Raw Material (of Rs. 20 Each totaling to Rs. 2000) to sub contractor. Sub contractor charged Rs.50 for doing the processing work. Now i brought this material from sub contractor to my stores and i borne the freight of Rs.25.
So i wanted to know.. At what value i should value the new stock (after processing)..
Will it be valued @ Rs. 2050 (i.e Rs.2000 of Raw Material + Processing cost of Rs.50) or @ Rs.2075 (i.e Rs.2000 of Raw Material + Processing cost of Rs.50 + transport cost of Rs.25)...
I tried searching AS-2 also. But i didn't got relevant point related to sub-contracting.
Please reply at ur earliest.
04 August 2011
AS -2 suggesting the valuation need to be actual cost or net realisable value which ever is less
so you case actual cost of the material per unit will be Rs.2075 and what is the realisable value need to be find and compare the same and value
so you case actual cost of the material per unit will be Rs.2075 and what is the realisable value need to be find and compare the same and value
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