Tindo ltd buys and sells product Q-3. On 1 June 2010, stock in hand consisted of 4,500 units which were acquired at ksh. 50 per unit. The operations for the month were as follows: Date. Purchases Sales 2: 5,000 @ ksh.48. - 6,000 @ ksh. 60 5: 5,500 @ ksh. 49. - 7: 4,000 @ ksh. 50. - 11: - 7,000 @ ksh. 61 12: 5,000 @ ksh. 50. - 13: 6,000 @ ksh. 47. - 18: 7,000 @ ksh. 62 19. 8,000 @ ksh. 64 20: 6,000 @ksh. 49.50 21: 5,000 @ ksh. 65 22: 7,000 @ ksh. 50 25: 6,000 @ ksh. 49 26: 2,000 @ ksh. 47 28: 500 @ ksh. 60 29: 14,000 @ ksh. 64 The company incurred operating cost of ksh. 450,000 during the month. Required: Prepare the stores ledger card using FIFO AND WEIGHTED AVERAGE Ascertain the closing inventory and cost of sales using each of the two methods Prepare the trading account for the month.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Tindo ltd buys and sells product Q-3. On 1 June 2010, stock in hand consisted of 4,500 units which were acquired at ksh. 50 per unit. The operations for the month were as follows:
Date. Purchases Sales
2: 5,000 @ ksh.48. -
6,000 @ ksh. 60
5: 5,500 @ ksh. 49. -
7: 4,000 @ ksh. 50. -
11: - 7,000 @ ksh. 61
12: 5,000 @ ksh. 50. -
13: 6,000 @ ksh. 47. -
18: 7,000 @ ksh. 62
19. 8,000 @ ksh. 64
20: 6,000 @ksh. 49.50
21: 5,000 @ ksh. 65
22: 7,000 @ ksh. 50
25: 6,000 @ ksh. 49
26: 2,000 @ ksh. 47
28: 500 @ ksh. 60
29: 14,000 @ ksh. 64
The company incurred operating cost of ksh. 450,000 during the month.
Required:
Prepare the stores ledger card using FIFO AND WEIGHTED AVERAGE
Ascertain the closing inventory and cost of sales using each of the two methods
Prepare the trading account for the month.
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