Question

From the following information, compute the raw material purchased.

Opening stock of Raw Material 20,000

Closing stock of Raw Material 30,000

Direct Wages 2,10,000

Factory Overhead 60% of Direct Wages

General overhead 10 % works cost

Cost of Production 6,88,600​

Answer 1

The total Cost of Raw Materials is 10,154,600 Rs.

GIVEN: Opening stock of Raw Material 20,000

             Closing stock of Raw Material 30,000

             Direct Wages 2,10,000

             Factory Overhead 60% of Direct Wages

             General overhead 10 % works cost

             Cost of Production 6,88,600​
TO FIND: Value of Raw Materials Consumed.
SOLUTION:

In this question,

We must prepare the statement of cost.

A statement of cost is a statement that records all the costs incurred during a financial year to run the operations of the business.

                             STATEMENT OF COST

Materials consumed

               Opening stock:                                           20,000

    Less:   Closing stock:                                            30,000

                                                                                    (10,000)

Direct Wages                                                               2,10,000

Factory overheads ( 60% * 210000)                           1.26,000

Cost of Production                                                       6,88,600

Total Cost                                                                     10,154,600

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