ABC is a brick manufacturing company. It Produces 120 raw bricks by input of
Raw material of Rs 100 and direct labor of Rs 400. The raw bricks are further processed into finished bricks with an additional cost of Rs 500.The Finished bricks produced from further processing of 120 raw bricks is 100 (20 bricks are normal loss) . The finished bricks consists of : Q-I is 20, Q-II is 30, Q-III is 40 and Q-IV is 10 bricks.
Q-III finished bricks are again reprocessed from beginning. The cost of reprocessing is Rs 20.
Out of Q-IV bricks 5 bricks are of realizable value of Rs 2 and other remaining brick of Q-IV is of Zero value.
Then what is the cost of the finished bricks?
Also, what is the value of Stock of finished bricks if Q-I has realizable value of Rs 20 and Q-II has realizable value of RS 15 and half of Q-III bricks is sold at a value of Rs 5 and half are reprocessed? Value inventory as per AS 2.Make Appropriate Assumption. Q’-denotes Quality.
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