Under FIFO, if opening stock is 200 units at ₹10 and 300 units are purchased at ₹12, the cost of issuing 250 units is:
A₹2,500
B₹2,800
C₹2,700
D₹2,600
Answer & Solution
Correct answer: D. ₹2,600
1. FIFO issues the earliest receipts first.
2. First 200 units come from opening stock at ₹10 = ₹2,000.
3. The remaining 50 units come from the new purchase at ₹12 = ₹600.
4. Total cost of issue = 2,000 + 600 = ₹2,600.
_Source: ICAI BoS Inter Paper 3, Ch 2 "Material Cost", §2.7 Illus 12_
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