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4 marksMaterial Control and Inventory Valuation

CAPE Accounting Unit 2 · 2021 · Paper 2 · Question 1(a)(iii)

Trelawney Inc. uses a periodic inventory system and provides inventory and purchase data for May 2019.

Compute the gross profit for Trelawney Inc. using the FIFO method if the items sold during May were at a sales price of $11 per unit.

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Other parts of this question

  1. 1(a)(i)Outline THREE differences between the FIFO and the LIFO inventory valuation methods.[6 marks]
  2. 1(a)(ii)Compute EACH of the following costs at 30 May 2019 using the FIFO method: • Ending inventory cost • Cost of goods sold[8 marks]
  3. 1(b)Compare the impact on the gross profit of an enterprise using the FIFO and LIFO methods during periods of inflation.[4 marks]
  4. 1(c)Outline the TWO main differences between 'cost allocation' and 'cost apportionment'.[4 marks]
  5. 1(d)Calculate the amount of overhead cost that will be assigned to EACH production department.[9 marks]

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