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6 marksMaterial Control and Inventory Valuation

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

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

Outline THREE differences between the FIFO and the LIFO inventory valuation methods.

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Other parts of this question

  1. 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]
  2. 1(a)(iii)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.[4 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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