Question

Goods are transferred from Department A to Department B at a price so as to include a profit of
33.33% on cost. If the value of closing stock of Department Y is '36,000, then the amount of stock
reserve on closing stock will be​

Answer 1

Answer:

9000

Explanation:

36000 * 1/(3+1)

= 36000 * 1/4

= 9000

Answer 2

Sometimes organizations has several departments of various type of products as the one department transfers the product as raw material to the other department and the department may transfer such raw material on the profit to the other , but considering the whole organization as one we need to deduct such stock reserve from the closing stock of department to show the actual profit earned by the department.

here,

stock reserve = closing stock of transferee * gross profit of transferor.

                       =  36000* 25%

                       = 9000

 (cost + profit = sales value )

 (100 + 33.33 = 133.33)

 (33.33 / 133.33 *100 = 25%)