Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

A newly established manufacturing company has now finished its first operating year. The information below concerns its inventory of direct materials. Date / units / $: - 2 January: 700 units at $20 - 2 July: 300 units at $26 The following quantities were removed from inventory for production. Date / items: - 4 January: 250 items - 5 July: 450 items What would the inventory be worth at the end of the year using the AVCO (periodic) method?

  • A$6540
  • B$6720
  • C$6900
  • D$7800

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