CA Inter P4 · Chapter 2 · Question 5 of 12
Opening stock of a material is 400 kg at ₹30 per kg. A purchase of 600 kg is made at ₹33 per kg. Thereafter 700 kg are issued to production. Under the FIFO method, the cost of material issued is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) ₹21,900
Explanation
Under FIFO the earliest units are issued first. Issue of 700 kg = 400 kg x ₹30 = ₹12,000 plus 300 kg x ₹33 = ₹9,900. Total cost of issue = ₹21,900.
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