Valuation of Inventories
Question 1:
Well Wear Limited is a Textile Manufacturing Company and engaged in the production of Polyester (P) and Nylon (N). While manufacturing the main products, a by-product Fiber (F) is also produced. Details of the cost of
production are as under:
Purchase of Raw Material for manufacturing process of
Average market price of Polyester and Nylon is 100 and 60 per unit respectively, by-product Fiber is sold@40 per unit. There is a profit of 8,000 on sale of by-product after incurring separate processing expenses of 10,000 and packing charges of 9,000. ` 5,000 was realized from sale of scrap.
On the basis of the above information, you are required to compute the value of closing inventory of Polyester and Nylon.
