Solved problems related to material costing


Records of the Sylhet Co. Ltd. show the following data relative to Material No. e—71:
Balance: July 1, 1967 … 1,050 units at Rs. 10/25
Purchases: July 3, 1967 … 1,200 units at Rs. 10/50
                        12, 1967 … 600 units at Rs. 11/00
                        24, 1967 … 300 units at Rs. 10/75
Issued:  July 2, 1967 … 750 units
                  18, 1967 … 900 units
                  29, 1967 … 300 units
Required: calculate the inventory balance and the cost of the material issued on each of the following bases:
(1) Last-in, first-out, Perpetual inventories are maintained and costs are charged out currently.
(2) Last-in, first-out. No book inventory is maintained.
Solution:           (1) Lifo-perpetual inventory
Material No. E—71
Cost of the material issued        Rs.   20,662/50
(2) Lifo-no book inventory
Cost of purchases of the material:
                                                            Rs.
1,050 units at 10/25 (Inventory)            10,762/50
1,200 units at 10/50                              12,600/00
600 units 11/00                                    6,600/00
300 units at 10/75                                 3,225/00
                                                                        33,187/50
Less inventory of the material (earliest costs):
July 1, 1967 (inventory), 1,050 units
                                    at Rs. 10/25     10,762/50
            3, 1967 (balance) 150 units
                                    at Rs. 10/50     1,575/00
                                                                        12,337/50
Cost of the material issued.                         Rs. 20,850/00
(It will be observed that there was no difference in the cost of the material issued by fifo system both under perpetual inventory and under no book inventory, but here the two figures are different).

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