CMA Foundation · Fundamentals of Financial and Cost Accounting · Consignment
Asha Ltd consigned 600 units costing Rs 50 each to Kiran. Asha paid freight Rs 3,000. Kiran sold 450 units. What is the value of closing stock on consignment, ignoring consignee expenses?
Closing stock is Rs 8,250. Total cost including freight is Rs 33,000 for 600 units, which is Rs 55 per unit, and 150 unsold units at Rs 55 give Rs 8,250. Leaving out freight would wrongly give Rs 7,500.
- ARs 7,500
- BRs 8,250Correct
- CRs 8,000
- DRs 7,750
Explanation
Total cost = 600x50 + 3,000 = Rs 33,000, so Rs 55 per unit. Unsold units = 150, and 150x55 = Rs 8,250. Option 1 ignores freight (150x50).
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