CMA Foundation · Fundamentals of Financial and Cost Accounting · Consignment
Nair Exports consigned 600 units costing Rs 100 each to Iyer & Co. Nair spent Rs 6,000 on freight. Iyer incurred Rs 3,000 on carriage inward and Rs 2,400 on selling expenses. Iyer sold 450 units, and 150 units remain. What is the value of closing stock?
Closing stock is Rs 17,250. Cost of 600 units is Rs 60,000 plus freight Rs 6,000 and carriage inward Rs 3,000, totalling Rs 69,000, or Rs 115 per unit. Selling expenses are excluded, so 150 unsold units are valued at Rs 17,250.
- ARs 16,500
- BRs 16,875Correct
- CRs 17,000
- DRs 17,250
Explanation
Cost = 60,000 + freight 6,000 + carriage inward 3,000 = Rs 69,000 for 600 units, i.e. Rs 115 per unit. Selling expenses are excluded. Closing stock = 150 x 115 = Rs 17,250. Rs 16,875 would wrongly include selling expenses in no way; the correct figure is Rs 17,250.
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