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2 marksMaterial Control and Inventory Valuation

CAPE Accounting Unit 2 · 2015 · Paper 2 · Question 1(b)(i)

In times of inflation, the market price of purchased materials increases.

Explain what happens under the FIFO stock valuation method to the value of the materials issued.

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Other parts of this question

  1. 1(a)(i)Prepare a schedule of cost of goods manufactured for the year ended 31 December 2014.[20 marks]
  2. 1(a)(ii)Calculate Sicard Industries' cost of goods sold (Cost of Sales) for the year ended 31 December 2014.[6 marks]
  3. 1(a)(iii)Prepare a schedule of Sicard Industries' selling and distributions costs for the year ended 31 December 2014.[5 marks]
  4. 1(b)(ii)Explain what happens under the FIFO stock valuation method to the value of closing inventories.[2 marks]

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