Question

A company buys its inventory of raw material from an overseas supplier. The raw material is a fungible asset and its price fluctuates wildly. In the month of January, the following transactions were recorded;
2 January; bought 30kg at £1/kg
4 January; bought 50kg at £1.20/kg
7 January; bought 40kg at £1.80/kg
10 January – sold 60kg for £120.
There was no opening inventory.

The value of inventory sold, using AVCO (WEIGHTED AVERAGE) was nearest to;
a) £45
b) £81
c) £66
d) £96

Answer 1

Answer:

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