QUESTION ONE
Information:
| November | TRANSACTIONS | NUMBER OF UNITS AND COST |
| 01 | Opening inventory | 1260 units @ R11 per unit |
| 08 | Purchased from supplier | 3150 units @ R12 |
| 12 | Issued to production | 2310 units |
| 19 | Returned to supplier | 525 units (purchased on 08 November) |
| 22 | Purchased from supplier | 1575 units @ R13 |
| 28 | Issued to production | 2625 units |
1.1 Use the transactions of Stark Industries to determine the value of the closing stock using the first- in- first out method. This stock consists of a component used in production of the final product. (10 marks)
QUESTION TWO
The following information relates to the only product made by Mario Traders for the year ended 31 July 2022:
| Opening inventory | 0 |
| Number of units manufactured | 945 000 |
| Number of units sold (at R310 per unit) | 756 000 |
| Direct materials cost per unit | R94 |
| Direct labour cost per unit | R123 |
| Variable manufacturing overheads cost per unit | R92 |
| Variable selling expenses per unit | R22 |
| Fixed manufacturing overheads cost | R18 900 000 |
| Fixed selling and administrative expenses | R15 750 000 |
- Draft the income statement for the year ended 31 July 2022 using the Marginal Costing method (10 marks)
- Draft the income statement for the year ended 31 July 2022 using the Absorption costing method (10 marks)
Solved Answers for Management Accounting Assignment
First in first out is an important method of inventory valuation. In this method of valuation, the inventory that is purchased initially is disposed of first. In the given case scenario of Stark industries, the valuation of closing stock using the first in first out method is performed as follows …………
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