Raw materials are not written down below cost if finished goods will sell
Abelow their cost
Bat half their cost
Cat a clear loss
Dat or above cost
Answer & Solution
Correct answer: D. at or above cost
If the products using the materials will recover their cost, there is no need to reduce the materials below cost.
Keep practising Inventories
Browse all Inventories questions for CA Foundation, or explore more Accounting topics.
Related questions
Land held for resale by a dealer is classified asWhich items count as inventories held as materials or supplies?Stock on 5 April is 2,40,000; April 1-5 sales 50,000 at 25% on cost, purchases 15,000. StoWhich three heads make up the cost of inventories?Costs of conversion include costs directly related to units, such asThe cost of inventories may be unrecoverable if stock isWhich inventory method most closely mimics the physical flow of goods?Opening stock 40,000; purchases 1,60,000; sales 2,00,000; gross profit 25% of sales. Closi