Closing Stock Valuation on account of food products

Stat Audit 969 views 3 replies

Suresh

OWNER

25 Points Joined February 2010

We are the manufactures of Food Products and have somany items as finshed goods at the end of every month. How to calculate the value of the same. Please explain as is it market value / market value less profit generated value / market value less tax value. For example my product is biscuts. per packet is Rs.50/-. In this material cost is Rs.25/- other overhead ex is Rs.40/- Margin is Rs.7/- distributor margin is Rs.3/-. What will be my closing stock value of the said one packet biscuts. Please explain me on urgent baisis.

Suresh

Replies (3)

Sunil Gupta

Service

181 Points Joined January 2009

Hi,

Finished goods are valued, as per AS, as cost + conversion cost. not amount of profit or tax are included, as conservatism is practiced so far as inventory valuation is concerned.

Sunil

Guest

As per accounting rule the valuation of stock will be calculated on the marker price or cost price, which ever is less. please do calculate the same as per this theory.