Joy limited purchased 20000 kg of raw material at rupees 20 per kg during the year 2020 to 2021.
particulars. units. amount
opening inventory
finished goods. 2000. 100000
raw materials. 2200. 44000
direct labour. 306000
fixed overheads. 300000
sales. 20000. 1120000
closing inventory
finished goods. 2400
raw materials. 1800
The plant has a capacity to produce 30,000 units of finished product per annum.however the actual production of finished products during the year 2020-21 was 20400 units. due to fall in the market demand the price of the finished goods in which the raw material has been utilised is expected to be sold at rupees 40 per unit The replacement cost of the raw material was 19 rupees per kg
you are required to ascertain the value of closing inventory as at as per accounting standard 2 31 March
plse explain me this problem.....
CAclubindia
