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5 marksCost Elements, Classification and Cost Curves

CAPE Accounting Unit 2 · 2009 · Paper 2 · Question 1(a)

A manufacturing company incurred eleven specified costs during 2008.

Classify each cost item (2 to 11) as being either a product (inventoriable) cost or a period (non-inventoriable) cost, using the provided table format.

This question uses a figure or table from the paper — you'll see it when you practise.

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Other parts of this question

  1. 1(b)(i)a)Calculate ending inventory, cost of goods sold, and gross profit under the First-in-First-out (FIFO) inventory valuation method.[5 marks]
  2. 1(b)(i)b)Calculate ending inventory, cost of goods sold, and gross profit under the Last-in-First-out (LIFO) inventory valuation method.[5 marks]
  3. 1(b)(i)c)Calculate ending inventory, cost of goods sold, and gross profit under the Weighted average inventory valuation method.[4 marks]
  4. 1(b)(ii)Indicate which of the valuation methods is the most appropriate if management's goal is to produce the most up-to-date inventory valuation on the Balance Sheet.[1 mark]
  5. 1(c)(i)Prepare a Cost of Goods Manufactured Statement for 2008.[10 marks]
  6. 1(c)(ii)Prepare an Income Statement for 2008.[5 marks]

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