Trace’s Ltd business sells three products: A, B and C. The following information was available at the year-end:

Question

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

Answer 1

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.