There was a problem with the first batch of items produced, so abnormal wastage costs of £0.10 per unit have also been incurred by Bruno At what cost should Bruno value this inventory in its financial statements? A £3.50 B £3.45

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Bruno has incurred the following costs in relation to a unit of inventory:

Raw material cost 1.50

Import duties 0.40

Direct labour 0.50

Subcontracted labour costs 0.80

Recoverable sales tax 0.20

Storage costs 0.05

Production overheads (per unit) 0.25

 

There was a problem with the first batch of items produced, so abnormal wastage costs of £0.10 per unit have also been incurred by Bruno

At what cost should Bruno value this inventory in its financial statements?

A £3.50

B £3.45

C £3.80

D £3.70

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