Question

QUESTION 1

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:

Answer 1

To calculate the amount of inventories at year end, we need to use the formula:

Amount of inventories = Units of inventory * (Original cost per unit + Selling and distribution costs per unit)

For Product A:

Amount of inventories = 20 * (R7 + R2) = R180

For Product B:

Amount of inventories = 25 * (R10 + R5) = R375

For Product C:

Amount of inventories = 15 * (R19 + R6) = R375

Therefore, the total amount of inventories at year end for Trace's Ltd business is:

R180 + R375 + R375 = R930

Step-by-step explanation: