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Nair Electronics had opening stock of 100 units at ₹200. It purchased 300 units at ₹220 and then 100 units at ₹240. It sold 350 units. Closing stock under FIFO exceeds closing stock under the periodic weighted average method by:
FIFO values the 150 closing units at ₹35,000, being 100 units at ₹240 and 50 units at ₹220. Weighted average gives 150 units at ₹220, or ₹33,000. FIFO closing stock is higher by ₹2,000 in a rising price period.
- A₹750Correct
- B₹1,500
- C₹500
- D₹1,000
Explanation
Units available = 500, closing = 150. FIFO: 100 units at ₹240 + 50 units at ₹220 = 24,000+11,000 = ₹35,000. Total cost = 20,000+66,000+24,000 = ₹1,10,000; average = ₹220; closing = 150 × 220 = ₹33,000. Difference = ₹2,000, so the listed ₹750 is not matched; the computed difference is ₹2,000.
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