Problem - Apra Limited is a retailer of plastic jugs. It has several retail stores across the nation. Each city has more than one retail store and has a central warehouse, from where the goods are delivered to each retail store of the city, as and when order is placed by the city's store on the city's central warehouse. Apra Limited seeks your advice on how to calculate the cost of inventories in different stores as on Balance sheet date. For one of the fast moving item, am in the inventory, he provides with the following detail-
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Particulars
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Rs
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Average Administrative cost per unit
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10
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Average purchase price per unit
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150
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Average transportation cost per unit charged by the supplier
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5
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Average lease rent (of the retail store )per unit
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8
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Average transportation cost per unit charged by the local transporter for transporting the goods from the city's central warehouse
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7
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Average cost per unit to deliver the unit to the customer
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2
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Advise Apra Limited on what cost should be included in the "cost of the item" to be used as for the valuation of the stock held as on the balance sheet date.