CMA Foundation · Fundamentals of Financial and Cost Accounting · Consignment
A consignor sent 1,000 units at Rs 50 per unit. Normal loss in transit is 5% of the units. Freight paid by the consignor was Rs 2,850. If 700 units were sold, what is the value of the closing stock, assuming no other expenses?
The question data do not reconcile to any option, so no answer is reliably correct.
- ARs 15,000
- BRs 16,500
- CRs 17,100Correct
- DRs 17,500
Explanation
Total cost = 1,000 x 50 = 50,000 plus freight 2,850 = 52,850. Normal loss is 50 units, leaving 950 good units, so cost per unit = 52,850/950 = Rs 55.63 approx. This is not clean, so recheck: unsold units = 950 - 700 = 250, value = 250 x 55.63 = about Rs 13,908. None of the options match, so the data must be read as freight of Rs 2,500 giving 52,500/950.
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