PCR June 07 past paper section 1

Bex
Bex Registered Posts: 33 ? ? ?
Sorry to be a pain, as I know you are all revising for yourselves but......

On the PCR June 07 past paper, section 1, how does the AAT answers arrive at the figures for the opening / closing stock valuation when doing the operating statement? :001_unsure:

The question doesn't state what the stock is valued at, and the answers haven't used the sales prices of £3 and £10 per unit?

I got the actual opening and closing stock figures and the production budget etc correct, but don't understand how the stock is valued at the final point.

I hate it when the AAT answers don't show you how they arrived at their figure, it doesn't help at all :thumbdown:

Bex

xx

Comments

  • haychie
    haychie Registered Posts: 23 Dedicated contributor ? ? ?
    I'm stuck on exactly the same bit! Let me know if you find out and i will you!!

    Regards H
  • Bex
    Bex Registered Posts: 33 ? ? ?
    Many thanks - I'm glad that it's not just me and my friend!!

    If I can't find out before Thursday, I will just use the sales price per unit in the exam if need be to obtain a stock valuation figure. That way, at least I will have a figure in there and my workings / layouts should make up for the incorrect figure used!?

    xx
  • swampy1901
    swampy1901 Registered Posts: 50 ? ? ?
    Is'nt it the cost of each item made up individually?

    i.e 1 labour hour to make 15
    20 grams of material and so on - I did a rough workout and came close to the figure in the answer.
    So in other words what it cost to make before adding on a bit to sell it at £3 or whatever

    Swampy
  • Andrewh26
    Andrewh26 Registered Posts: 69 ? ? ?
    O.stock = cost of production 175240 / sales 206550 x o.stock x sales price (5303 x £3)
  • carjon
    carjon Registered Posts: 14 Regular contributor ⭐ ? ⭐
    Hi Bex, i got this from my Lecturer today as I was hitting a wall with it aswell are you ok on it now ?
  • carjon
    carjon Registered Posts: 14 Regular contributor ⭐ ? ⭐
    Just incase this is what i got from my lecturer
    OK you have turnover of 206'550, you then have 71932+48060+55248 added together to give you 175240( this is for materials, labour and overheads respectively). The 175240 figure is your cost of production, divide this by 69'055( production) to give you a unit cost of 2.53something, you then multiply the unit cost by the number of opening stock and closing stock. So you have your 175240+13'457(o/s)-13978. So the overall figure is cost of production + o/s-c/s = 174'720( this is is your cost of sales). 206550(turnover) less the 174'720( cost of sales) = 31'830 profit
  • Kevin
    Kevin Registered Posts: 1 New contributor ?
    Hi The method mentioned works on the closing stock but not the opening stock... HELP
  • fpettifer
    fpettifer Registered Posts: 40 ? ? ?
    is this the one with that standard and luxury mobile phone covers? Wasted an hr on it last week! Just can't work out the figure for the luxury model. I think there's rounding issues otherwise I'm missing a figure to include somewhere?!?
  • Sully786
    Sully786 Registered Posts: 9 Regular contributor ⭐ ? ⭐
    PCR june 07 exam

    Hi I think i can help you out with your query.
    In operating statement you need to calculate the cost per unit then you multipy it with you opening or closing stock finished goods.
    For example in PCR june07, Tak1.1(g) we will calculate opening and closing stock as follows

    £175240 divided by 69055 planned units and multiply by opening stock 5303.
    you will come up with £13978 which is your opening stock value.
    same process for closing stock but multiply by closing stock of 5508.

    I hope thats clear for you now.
  • Bex
    Bex Registered Posts: 33 ? ? ?
    Answer At Last

    Afternoon all,

    Wow, I am so pleased that, that stock valuation hadn't just thrown me!

    A kind member emailed me her formulae for working it out and it works for the opening and the closing stock figures, and actually makes perfect sense:

    cost of production / no. units produced x stock units

    Thank you to all of you above and to Nikky Manning who emailed me this last night. It may save my skin if it comes up now! :thumbup:

    GOOD LUCK TO ALL OF YOU FOR TOMORROW

    Bex

    xxx :001_smile:
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