Acca financial Accounting (FA) Study Text ac ca (FA)

inventories according to IAS 2? 

A 

Foreman’s wages, carriage inwards, carriage outwards, raw 

materials. 

B 

Raw materials, carriage inwards, costs of storage of finished goods, 

plant and machinery costs. 

C 

Plant and machinery costs, carriage inwards, raw materials, 

foreman’s wages. 

D 

Carriage outwards, raw materials, foreman’s wages, plant and 

machinery costs. 

 

 

 

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Chapter 6 

KAPLAN PUBLISHING

 

105 

5 

Methods of calculating the cost of inventory 

Method Key 

points 

 

Unit cost 

This is the actual cost of 

purchasing identifiable 

units of inventory. 

Only used when items of 

inventory are individually 

distinguishable and of high 

value. 

FIFO – first in 

first out 

For costing purposes, the 

first items of inventory 

received are assumed to 

be the first ones sold. 

The cost of closing inventory is 

the cost of the most recent 

purchases of inventory.