"Process B had no opening inventory. 13,500 units of raw material were transferred in at Rs 4.50 per unit. Additional material at Rs1.25per… — Answer & Discussion

"Process B had no opening inventory. 13,500 units of raw material were transferred in at Rs 4.50 per unit. Additional material at Rs1.25per unit was added in process. Labour and overheads were Rs 6.25 per completed unit and Rs 2.50 per unit incomplete.If 11,750completed units were transferred out, what was the closing inventory in Process B?"

ARs 6562.50
BRs 12,250.00
CRs 14,437.50
DRs 25,375.00

Correct answer: C

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Discussion 2

Top voted Oldest Newest

CCommunity01 Jun 2021

Rs 14,437.50

CCommunity14 Nov 2021

Solution:

Given: Total units = 13,500

Completed units = 11,500

Incompleted units = 13,500 - 11,750 = 1750

Given : Opening inventory = 0

Purchases,

Rs. 4.50/unit for transferring

Rs. 1.25/unit for additional materials

Rs. 2.50/ incomplete unit for labour and overhead charges.

So, Closing inventory = 1750 × ( 4.50 + 1.25 + 2.50)

= 1750 × 8.5

= Rs.14,437.5

So, the correct option is C). 14,437.5