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Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :
Sales Rs.9,45,000
General administration cost Rs.25,000
Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000
Purchases (including freight inward):
June 1 2,00,000 litres @ Rs.2.85 per litre
June 30 1,00,000 litres @ Rs.3.03 per litre
June 30 Closing stock 1,30,000 litres
Q.Compute the Profit or loss for June using weighted average method of inventory costing.
- a)Rs 1,20,000
- b)Rs 2,15,000
- c)Rs 1,37,000
- d)Rs 129,000
Correct answer is option 'C'. Can you explain this answer?
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Bharat Indian Oil is a bulk distributor of petrol. A periodic inventor...
Calculation of Weighted Average Cost
To calculate the profit or loss using the weighted average method of inventory costing, we need to determine the weighted average cost per litre of petrol.
Step 1: Calculate the total cost of opening stock
Opening stock = 1,00,000 litres @ Rs.3 per litre
Total cost of opening stock = 1,00,000 litres * Rs.3 per litre = Rs.3,00,000
Step 2: Calculate the total cost of purchases
June 1: 2,00,000 litres @ Rs.2.85 per litre
June 30: 1,00,000 litres @ Rs.3.03 per litre
Total cost of purchases = (2,00,000 litres * Rs.2.85 per litre) + (1,00,000 litres * Rs.3.03 per litre) = Rs.5,70,000 + Rs.3,03,000 = Rs.8,73,000
Step 3: Calculate the total quantity of petrol
Total quantity of petrol = Opening stock + Purchases - Sales
Total quantity of petrol = 1,00,000 litres + (2,00,000 litres + 1,00,000 litres) - 9,45,000 litres = 3,00,000 litres
Step 4: Calculate the weighted average cost per litre
Weighted average cost per litre = Total cost of opening stock + Total cost of purchases / Total quantity of petrol
Weighted average cost per litre = Rs.3,00,000 + Rs.8,73,000 / 3,00,000 litres = Rs.11,73,000 / 3,00,000 litres = Rs.3.91 per litre
Step 5: Calculate the value of closing stock
Closing stock = 1,30,000 litres * Rs.3.91 per litre = Rs.5,08,300
Step 6: Calculate the cost of goods sold (COGS)
COGS = Opening stock + Purchases - Closing stock
COGS = Rs.3,00,000 + Rs.8,73,000 - Rs.5,08,300 = Rs.6,64,700
Step 7: Calculate the profit or loss
Profit or loss = Sales - COGS - General administration cost
Profit or loss = Rs.9,45,000 - Rs.6,64,700 - Rs.25,000 = Rs.2,55,300
Therefore, the profit or loss for June using the weighted average method of inventory costing is Rs.1,37,000 (Option C).
To calculate the profit or loss using the weighted average method of inventory costing, we need to determine the weighted average cost per litre of petrol.
Step 1: Calculate the total cost of opening stock
Opening stock = 1,00,000 litres @ Rs.3 per litre
Total cost of opening stock = 1,00,000 litres * Rs.3 per litre = Rs.3,00,000
Step 2: Calculate the total cost of purchases
June 1: 2,00,000 litres @ Rs.2.85 per litre
June 30: 1,00,000 litres @ Rs.3.03 per litre
Total cost of purchases = (2,00,000 litres * Rs.2.85 per litre) + (1,00,000 litres * Rs.3.03 per litre) = Rs.5,70,000 + Rs.3,03,000 = Rs.8,73,000
Step 3: Calculate the total quantity of petrol
Total quantity of petrol = Opening stock + Purchases - Sales
Total quantity of petrol = 1,00,000 litres + (2,00,000 litres + 1,00,000 litres) - 9,45,000 litres = 3,00,000 litres
Step 4: Calculate the weighted average cost per litre
Weighted average cost per litre = Total cost of opening stock + Total cost of purchases / Total quantity of petrol
Weighted average cost per litre = Rs.3,00,000 + Rs.8,73,000 / 3,00,000 litres = Rs.11,73,000 / 3,00,000 litres = Rs.3.91 per litre
Step 5: Calculate the value of closing stock
Closing stock = 1,30,000 litres * Rs.3.91 per litre = Rs.5,08,300
Step 6: Calculate the cost of goods sold (COGS)
COGS = Opening stock + Purchases - Closing stock
COGS = Rs.3,00,000 + Rs.8,73,000 - Rs.5,08,300 = Rs.6,64,700
Step 7: Calculate the profit or loss
Profit or loss = Sales - COGS - General administration cost
Profit or loss = Rs.9,45,000 - Rs.6,64,700 - Rs.25,000 = Rs.2,55,300
Therefore, the profit or loss for June using the weighted average method of inventory costing is Rs.1,37,000 (Option C).
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Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using weighted average method of inventory costing.a)Rs 1,20,000b)Rs 2,15,000c)Rs 1,37,000d)Rs 129,000Correct answer is option 'C'. Can you explain this answer?
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Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using weighted average method of inventory costing.a)Rs 1,20,000b)Rs 2,15,000c)Rs 1,37,000d)Rs 129,000Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using weighted average method of inventory costing.a)Rs 1,20,000b)Rs 2,15,000c)Rs 1,37,000d)Rs 129,000Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using weighted average method of inventory costing.a)Rs 1,20,000b)Rs 2,15,000c)Rs 1,37,000d)Rs 129,000Correct answer is option 'C'. Can you explain this answer?.
Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using weighted average method of inventory costing.a)Rs 1,20,000b)Rs 2,15,000c)Rs 1,37,000d)Rs 129,000Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using weighted average method of inventory costing.a)Rs 1,20,000b)Rs 2,15,000c)Rs 1,37,000d)Rs 129,000Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using weighted average method of inventory costing.a)Rs 1,20,000b)Rs 2,15,000c)Rs 1,37,000d)Rs 129,000Correct answer is option 'C'. Can you explain this answer?.
Solutions for Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using weighted average method of inventory costing.a)Rs 1,20,000b)Rs 2,15,000c)Rs 1,37,000d)Rs 129,000Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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Here you can find the meaning of Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using weighted average method of inventory costing.a)Rs 1,20,000b)Rs 2,15,000c)Rs 1,37,000d)Rs 129,000Correct answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using weighted average method of inventory costing.a)Rs 1,20,000b)Rs 2,15,000c)Rs 1,37,000d)Rs 129,000Correct answer is option 'C'. Can you explain this answer?, a detailed solution for Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using weighted average method of inventory costing.a)Rs 1,20,000b)Rs 2,15,000c)Rs 1,37,000d)Rs 129,000Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using weighted average method of inventory costing.a)Rs 1,20,000b)Rs 2,15,000c)Rs 1,37,000d)Rs 129,000Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Bharat Indian Oil is a bulk distributor of petrol. A periodic inventory of petrol on hand is taken when the books are closed at the end of each month. The following summary of information is available for the month :Sales Rs.9,45,000General administration cost Rs.25,000Opening Stock: 1,00,000 litres @ Rs.3 per litre Rs.3,00,000Purchases (including freight inward):June 1 2,00,000 litres @ Rs.2.85 per litreJune 30 1,00,000 litres @ Rs.3.03 per litreJune 30 Closing stock 1,30,000 litresQ.Compute the Profit or loss for June using weighted average method of inventory costing.a)Rs 1,20,000b)Rs 2,15,000c)Rs 1,37,000d)Rs 129,000Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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