Page 111 - F2 - MA Integrated Workbook STUDENT 2018-19
P. 111

Accounting for materials




               4.1  First In, first out







                   Example 5




                   Date             Receipts                      Issues                 Balance

                              Qty      Per     Value     Qty        Per      Value     Qty     Value
                                       unit                         unit
                   01/08                                                               150      $150

                   03/08      200     $1.20    $240                                    350      $390
                   09/08                                   150      $1.00    $150

                                                           100      $1.20    $120
                                                          ––––       ––––    ––––

                                                           250      $1.08    $270      100      $120
                   13/08      250     $1.30    $325                                    350      $445

                   16/08                                   100      $1.20    $120
                                                           100      $1.30    $130

                                                          ––––       ––––    ––––
                                                           200      $1.25    $250      150      $195




                         Advantages                               Disadvantages

               FIFO      Up to date closing inventory value       Out of date valuation on issues to
                         as the recent priced items remain in  production as old prices are used to
                         inventory.                               value issues to production.

                                                                  Identical jobs may have different
                                                                  costs.

















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