10,000 litres of oil were consigned to a wholesaler the cost being100 per litre by incurring freight8000. 10% of loss unavoidable. 8000 litres were sold by the consignee. the remaining stock of 1000 litres were valued at
Ans Given is 112000 plz explain
TOTAL COST OF 10000 LTR. 1000000
+ FREIGHT 8000
- NORMAL LOSS(1000LTR)
HENCE TOTAL COST OF 9000LTR.=1008000
PERLITRE COST= 1008000/9000=112 RS.
HENCE VALUE OF CL. STOCK = 1000*112= 112000RS.
NOTE- NORMAL LOSS WILL ONLY DECREASE THE QTY. HENCE COST OF REMAINING WILL BE INCREASED
Hi,
1st u need to calculate the Cost of the goods.. since there is an 10% unavoidable loss the cost of that loss should be included in the remaining cost... For the above answer is..
10000 Ltrs X 100 = 1000000 + 8000 = 1008000/9000 (10000 - 10% unavoidable loss) = so the cost of remaining is Rs 112 /ltr...
1000 Stocks left X Rs. 112 = 112000..
Hope you understood now.
Girish
The Answer is simple. The cost is total qty multiplied with unit rate plus freight. Since there is unaviodable loss of 10% the total cost shall absorbed by remaing 90% units.This give you per unit cost and mutiply this with 1000 units in hand and you will get the answer. The only funda is unavoidable loss treatement.
i hope you understand it..............
rgds
Sanjay Sareen
yes i agree with girish and future ca
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