Good afternoon, in this exercise I am having difficulty in understanding the value of change in inventories, because in the resolution they say that it is 8600, but that is the value of the WIP closing inventory. In my opinion, I went to calculate the change of wip (7600) and finished goods (100), which would give a total of 7700.
Can you explain to me what is wrong with my reasoning?
In reply to Mariana Carvoeiras do Nascimento Pires
Re: midterm fall 2122 - ex 3.2
Hello Mariana,
The change in WIP Inventories is correct, 7 600€ (8 600€ - 1000 €)
However, the change in Finished Goods is not 100 €. If you look at the table, it says 100 units and not 100€. Therefore, using the COGM/unit that you had found out in 3.1 (10€), you can find that these 100 units in closing inventories are worth 1 000€
Therefore, change in inventories is 7 600€ (change in WIP) + 1 000€ (change in FG)
Good study!
The change in WIP Inventories is correct, 7 600€ (8 600€ - 1000 €)
However, the change in Finished Goods is not 100 €. If you look at the table, it says 100 units and not 100€. Therefore, using the COGM/unit that you had found out in 3.1 (10€), you can find that these 100 units in closing inventories are worth 1 000€
Therefore, change in inventories is 7 600€ (change in WIP) + 1 000€ (change in FG)
Good study!