CPT accounts doubt

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