pcr

tazzy

can anyone explain how to do the opening and closing stocks when doing an operating statement thanks.

LouLou143

Don't forget that opening and closing stocks are only for absorption costing in the operating statement - As you adjust for it in marginal costing if sales and production are different.

Closing Stock - You have to work out the cost of production (materials and labour etc) and divide by the gross production sales figure. Then multiple by how much you have in closing stock in your production figure...

EG.

Sales 1840
opening stock (200)
clsoing stock 360

---

2000

Materials = £100,000
Labour = £32,000
Oveheads = £16,000
TOTAL = £148,000

So £148,000/2000 x 360 = £26640 cost of closing stock.

They will always give the cost of opening stocks. But it would be the same principle but based on last years/quarters figures.

Hope this helps

sjf

Hi

Thank you LouLou143 :thumbup1:
I was stuck on that too, and I was not looking forward to exam after Mondays PEV.

LouLou143

No problems - not looking forward to it either to be honest.....I have done most of the past papers and things keep turning up in them that we haven't been taught!!!