Trace’s Ltd business sells three products: A, B and C. The following information was available at the year-end:
Product A: Original cost per unit, R7 Estimated selling price per unit, R15 Selling and distribution costs per unit, R2
Units of inventory:20
Product B: Original cost per unit, R10 Estimated selling price per unit, R13 Selling and distribution costs per unit, R5
Units of inventory:25
Product C: Original cost per Unit, R19 Estimated selling price per unit, R20 Selling and distribution costs per unit, R6
Units of inventory:15
The amount of inventories at year end will be:
a.
R675
b.
R670
c.
R795
d.
R550
The amount of inventories at the year end can be calculated as follows:
For Product A:
Original cost per unit * Units of inventory = R7 * 20 = R140
For Product B:
Original cost per unit * Units of inventory = R10 * 25 = R250
For Product C:
Original cost per unit * Units of inventory = R19 * 15 = R285
Total amount of inventories at the year end = R140 + R250 + R285 = R675
Therefore, the correct answer is: a. R675