Massy Distribution Center (MDC) had 500 boxes of IGA Cornflakes at 30 September 2022 in inventory. The product had been purchased at list price of $18 per box and normally sells for $24 per box. Additional information relating to the units in inventory: VAT – 10%; wharehousing cost - $0.55 per unit; purchase discount - $0.40 per unit; carriage inwards - $0.60 per unit. Recently , due to poor handling and storage, several boxes appeared less than presentable however the contents were not compromized and MDC can still sell this item at $24 per unit, provided that some rectification/re-packaging work is undertaken at a cost of $3 per unit. What is the cost and the net realizable value of the cornflakes ?
Massy Distribution Center (MDC) had 500 boxes of IGA Cornflakes at 30 September 2022 in inventory. The product had been purchased at list price of $18 per box and normally sells for $24 per box. Additional information relating to the units in inventory: VAT – 10%; wharehousing cost - $0.55 per unit; purchase discount - $0.40 per unit; carriage inwards - $0.60 per unit. Recently , due to poor handling and storage, several boxes appeared less than presentable however the contents were not compromized and MDC can still sell this item at $24 per unit, provided that some rectification/re-packaging work is undertaken at a cost of $3 per unit. What is the cost and the net realizable value of the cornflakes ?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Massy Distribution Center (MDC) had 500 boxes of IGA Cornflakes at 30 September 2022 in
inventory. The product had been purchased at list price of $18 per box and normally sells for
$24 per box.
Additional information relating to the units in inventory: VAT – 10%; wharehousing cost - $0.55
per unit; purchase discount - $0.40 per unit; carriage inwards - $0.60 per unit.
Recently , due to poor handling and storage, several boxes appeared less than presentable
however the contents were not compromized and MDC can still sell this item at $24 per unit,
provided that some rectification/re-packaging work is undertaken at a cost of $3 per unit.
What is the cost and the net realizable value of the cornflakes ?
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