Video Productions Ltd commenced business manufacturing video tapes on 1 July 2011.Summary data for the first full year of production are:

Packaging and delivery are essential to be able to sell the product.What total value should be attributed to finished goods inventory in the financial statements in accordance with AASB 102?

Question

Video Productions Ltd commenced business manufacturing video tapes on 1 July 2011.Summary data for the first full year of production are:

Packaging and delivery are essential to be able to sell the product.What total value should be attributed to finished goods inventory in the financial statements in accordance with AASB 102?

Quizplus · Accepted Answer

The total value of finished goods inventory should be calculated as the cost of production, which includes direct materials, direct labor, and manufacturing overheads. Using the given data, the cost of production for the year is $50,000 ($20,000 + $15,000 + $15,000). Therefore, the value attributed to finished goods inventory in the financial statements should be $50,000. Choices A, B, and C are all incorrect because they do not accurately calculate the cost of production or include all necessary components to determine finished goods inventory value.

Video Productions Ltd Commenced Business Manufacturing Video Tapes on 1