Home For AAT student members AQ 2013 AAT Level 3 (Level 6 in Scotland)
Current updates regarding coronavirus (Covid-19) and the precautions AAT are taking will be continually updated on the below page.

Please check this link for the latest updates:
We hope you are all safe and well and if you need us we will be here. 💚

Cost and revenues practice assessment 1 - question 1 on the AAT website

Hello everyone,

This is probably going to sound like a silly question but I am having one of those pre-exam moments where I seem to forget all of the simple things!

Question 1asks for the inventory record to be worked out using the FIFO method. Link below

For the issue on the 27th December, how is the cost of 2.167 per unit worked out?

Also, in part B of the question, how do you arrive at a figure of 15720 when working out the total issue of 7200kg on the 13th December using the FIFO method?


  • Adele69Adele69 CambridgeAAT Student Posts: 320
    I haven't done this one yet, hoping to go through at work tomorrow... but on the first part, the issue on 27th Dec is from the remaining 800 units at 2.250 = £1800 + 4000 units at 2.150 = £8600. Together these total £10400, and dividing by 4800 units is 2.167 to 3dp. I've only ever filled in tables like this for AVCO as otherwise the unit costs are just confusing. I'm also doing this exam tomorrow so better get back to it :)
  • Adele69Adele69 CambridgeAAT Student Posts: 320
    The second bit I found a lot more difficult but probably worth working through it because if this comes up again later I have more chance of remembering this.

    Starting with 8000 units balance at 2.25. First receipt is additional 4800 units at 2.15.
    Then the LIFO issue 7200 units: 4800 units (as last-in) at 2.15 = £10320 + 2400 units from the opening balance at 2.25 = £5400. Combined these total £15720.
  • JoshJ1992JoshJ1992 Registered Posts: 75
    Hi Adele69,

    Thank you for this - I think it makes sense now.

    Good luck with your exam tomorrow :)
Sign In or Register to comment.