Issues of materials may be priced at the current market price. This may again be :
(a) Replacement Price or Purchase Price: It is the price existing at the time of issue. If materials
are consumed in the process of production or sale, replacement has to be made by new
purchase from the market. So the replacement cost is given importance for inventory
valuation.
(b) Realisable Price or Sale Price Method : It is the price which can be realised if the materials
issued to different jobs or work orders are sold out.
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