The following transactions of Berain Manufacturers, that uses the perpetual inventory system, took place during February 2024 in respect of a part used in production:

01 Stock on hand 600 units @ R34 per unit
08 Issued to production 420 units
15 Purchased from supplier 1800 units @ R35.50 per unit
16 Issued to production 700 units
17 Returned to supplier (purchased on 15 February 2024) 120 units
26 Issued to production 800 units

Using the first-in-first-out (FIFO) method, calculate the value of closing inventory as at 28 February 2024.
The following information was extracted from the accounting records of Hilton Manufacturers for the year ended September 2024:

Inventory at the beginning of the year Nil
Production for the year 28 500
Sales for the year 24 000
Selling price per unit R82
Direct Materials cost per unit 22
Direct Labour cost per unit 11
Variable Manufacturing overheads per unit 7
Variable selling and administrative cost per unit 5
Fixed manufacturing overhead cost 274 000
Fixed selling and administrative cost 95 000

The company utilises the first-in-first-out method of inventory valuation.

(Round of to two decimal places)

Prepare the Income Statement using the Marginal Costing method. (11)

Prepare the Income Statement using the Absorption Costing method. (9)

Answers on Above Questions on Management Accounting 

Answer 1: The value of closing inventory as at 28 February 2024 by using the first in first out (FIFO) is calculated as follows:


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