In institute's textbook,practical problems question no2 (M.A.Ltd)
The amount of production expected is given, does that mean production for the current year is given or production adjusting opening stock is given ?
The estimate of only production of year 1 and year 2 are given.
So should we need to adjust the opening stock
Yes you should adjust opening stock
But when finding the raw material value they didn't adjust the value of opening stock
They took it as 9000 units itself. Why ?
Since, 1000 unites are finished goods they need not be considered in computation of raw materials. they are readily available for sale.