CA Foundation · Accounting · Inventories
Mehta Ltd. had opening stock of 400 units at ₹30 per unit. It bought 600 units at ₹35 per unit and then sold 500 units. Using the weighted average method (periodic), the closing stock value is:
Closing stock is ₹16,500. Total cost of ₹33,000 over 1,000 units gives a weighted average of ₹33 per unit. With 500 units remaining after sales, closing stock is 500 multiplied by ₹33, which equals ₹16,500.
- A₹16,500Correct
- B₹17,000
- C₹16,250
- D₹18,000
Explanation
Total cost = 400×30 + 600×35 = 12,000 + 21,000 = 33,000 for 1,000 units, so average cost = ₹33 per unit. Closing units = 1,000 − 500 = 500, so closing stock = 500×33 = ₹16,500. FIFO would give 500×35 = ₹17,500, and using the last price gives the same kind of error.
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