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 year end can be calculated as follows:
For Product A:
20 units x (R7 + R2) = 20 units x R9 = R180
For Product B:
25 units x (R10 + R5) = 25 units x R15 = R375
For Product C:
15 units x (R19 + R6) = 15 units x R25 = R375
Total amount of inventories at year end = R180 + R375 + R375 = R930
Therefore, none of the options provided (a, b, c, d) match the correct calculation.