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3 marksMaterial Control and Inventory Valuation

CAPE Accounting Unit 2 · 2017 · Paper 2 · Question 1(c)(ii)

Orchid Enterprise provided raw materials inventory records of receipts and disbursements for March 2016.

Compute the value of the closing inventory of raw materials for March 2016 using the Average cost method.

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Other parts of this question

  1. 1(a)Prepare a schedule of the cost of goods manufactured for the year ending 31 December 2016.[17 marks]
  2. 1(b)(i)Identify the unit costs which will be relevant to the decision to be made by Orchid Enterprise and calculate the total unit cost.[5 marks]
  3. 1(b)(ii)Should the company accept the special order? Justify your answer.[3 marks]
  4. 1(c)(i)Compute the value of the closing inventory of raw materials for March 2016 using the First-in, first-out (FIFO) method.[3 marks]
  5. 1(d)List TWO principles of material control and give an example of EACH principle.[4 marks]

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