CA Intermediate · Cost and Management Accounting · Material Cost
Anand Engineering issues material using the weighted average method (recalculated after every receipt). Opening stock: 200 units at Rs 100. Purchased on 5 June: 300 units at Rs 110. Issued on 8 June: 250 units. Purchased on 12 June: 100 units at Rs 120. Issued on 15 June: 200 units. What is the value of closing stock?
Under weighted average, closing stock is 150 units valued at Rs 110 each, which gives Rs 16,500. This figure does not match any of the printed options.
- ARs 15,200Correct
- BRs 14,800
- CRs 15,000
- DRs 14,400
Explanation
After 5 June: 500 units, Rs 53,000 (20,000 + 33,000), average Rs 106. Issue 250 x 106 = 26,500; balance 250 units, Rs 26,500. Add 100 at 120 = 12,000: 350 units, Rs 38,500, average Rs 110. Issue 200 x 110 = 22,000; closing 150 units, Rs 16,500. So the correct closing value is Rs 16,500, which is not among the options.
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