Question concerning ssap 9

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:28AM in AAT student discussion
Can anyone tell me how the cost of both part finished goods and finished goods be calculated in order to compare it to the net realisable value?

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Question concerning ssap 9

    part finished and finished goods should include the direct cost of production plus a share of overheads, based upon normal levels of production.<BR><BR>NRV is seeling price less any further costs of getting goods to the point of sale
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Question concerning ssap 9

    to value part finshed goods you got to calculate a percentage of how far are the goods completed. Then you take that percentage and multiply it by the lowest value between the net realisable value of the finished goods and the cost of the finished goods. e.g If good "Y" lowest value is £10. You will value finished goods on that value. Lets say you got 20 Ys of goods as working in progress and you find out that they are about 60% completed.<BR>The value of working in progress stock will be: 20*.65*10= £130
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Question concerning ssap 9

    I think you are confusing SSAP 9 with process costing. To repeat myself, the value of WIP is the lower of:<BR><BR>the cost of materials, labour and a share of overheads, and<BR><BR>the amount the stock could be sold for, if it were saleable, less any further costs required to get it into a saleable condition.<BR><BR>

Categories

Privacy Policy