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JAMB Principles of Accounts 2004 Question 15

Question 15

Stock Valuation

Use the information below to answer questions 14 and 15.
Date | Receipt (Units) | Issued (Units)
May 2 | 80 @ ₦3.00 | —
May 10 | 50 @ ₦3.20 | —
May 17 | — | 20
May 25 | — | 60
May 31 | 20 @ ₦2.90 | —
Based on the FIFO method of valuation, the total cost of the raw materials issued is

  1. A.₦150
  2. B.₦160
  3. C.₦240
  4. D.₦250
Show the answer and explanation

Answer: C (₦240)

Explanation

80 units are issued (20 + 60). Under FIFO they all come from the first batch of 80 at ₦3.00: 80 × 3 = ₦240.