USW Ltd a manufacturing entity manufactures specialized robust cell phone cases for resale. The manufacturing cost per ton is R850. Finished products are sold for R935 per ton. Sales expenses amount to R45 per ton, delivery costs amount to R35 per ton and other directly associated costs to inventory to make a sale is R25 per ton. Closing inventories on hand at 31 December 2020 amounts to 3 500 tons.The amount that must be used to write down inventories to its net realisable value is?R70 000R75 000R80 000R85 000

The answer is option (1.) [ i.e, R70 000] Refer step 2 for explanation

Answered: USW Ltd a manufacturing entity…

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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USW Ltd a manufacturing entity manufactures specialized robust cell phone cases for resale. The manufacturing cost per ton is R850. Finished products are sold for R935 per ton. Sales expenses amount to R45 per ton, delivery costs amount to R35 per ton and other directly associated costs to inventory to make a sale is R25 per ton. Closing inventories on hand at 31 December 2020 amounts to 3 500 tons.

The amount that must be used to write down inventories to its net realisable value is?
1. R70 000
2. R75 000
3. R80 000
4. R85 000

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