Basic query in accounting

This query is : Resolved

pavankumar (Querist)
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01 October 2013 Raw material inventory of a company includes certain material purchased at Rs 100 kg.The price of the material is on decline and replacement cost of the inventory at the year end is Rs 75 per Kg.It is possible to convert the material into finished product at conversion cost of Rs 125.Expected Selling price is Rs 175.

In the above problem what will be “Cost of finished Goods “and “NRV of finished Goods”?

I will be very much thankful to you.

Amey Satish Gogate

Amey Satish Gogate (Expert)
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02 October 2013 If there is Raw Material in hand then it will be valued at 50 (nrv=175-125)
Finished goods shall be valued at 175 being lower of cost or nrv

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