Topic to be tested:
Home Comforts is dealing in the manufacturing of wood products since last two decade in more than 5 cities of Pakistan. The company uses First in First out (FIFO) method for costing its raw materials. On 1st January 2015, the stocks of raw material, work in process and finished goods were Rs. 20,000, Rs. 8,000 and Rs. 3,000 respectively. During the year, material was purchased on 10th January and 15thJuly at Rs. 100,000 and Rs. 60,000 respectively with total freight inward of Rs. 1,000. Direct Labor cost was Rs. 50,000 and marketing manager salary was of Rs. 70,000 while conversion cost was recorded as Rs. 80,000.
At the year end, no inventories were found in hand except work in process which was twice of the balance as on 31st December 2014.
anyone solve it properly....???
actually hamen bataya hua ha k company is using FIFO method ,,,1st part k solution ka FIFO se koi concern nhe hai.. then 1st part k answers ko dekhte hue hamen yeh batana hai 2nd part men k agar company LIFO method use kerty tuh factory cost pe kia impact perta..
Thanks apne question dobara bata dia :-) ye sub ko pata hai impact kia hoga ye pata karna hai janab,,,,
The FIFO and LIFO method is used when the raw material is purchased at several different costs, the inventory (stock) will have several different unit prices. In this GDB no different unit prices are mentioned. So there is no impact of FIFO and LIFO.
gud abdul ghaffar u r absolutely right
Helping Points for second part of gdb
FIFO: (+) Higher value of inventory (-) Lower cost of goods sold
LIFO: (-) Lower value of inventory (+) Higher cost of goods sold
FIFO: (-) Lower value of inventory (+) Higher cost of goods sold
LIFO: (+) Higher value on inventory (-) Lower cost on goods sold
Please Discuss here about this GDB.Thanks
Our main purpose here discussion not just Solution
We are here with you hands in hands to facilitate your learning and do not appreciate the idea of copying or replicating solutions.
plz M.Tariq Malik upload the slution file