Question

The value of raw material consumed from the following given information will be:

Opening stock of Raw Material          ₹ 25,000
Add: Purchase of Raw Material           ₹ 1,00,000
Less: Closing stock of Raw Material     ₹ 40,000

Raw Material Consumed = ₹ (25,000 + 1,00,000 - 40,000) = ₹ 85,000

• A. ₹ 85,000
• B. ₹ 60,000
• C. ₹ 45,000
• D. ₹ 1,65,000

Hint:

Always remember — Consumed = Opening + Purchases – Closing.

Answer 1

The Correct Option is A

The formula for calculating the value of raw material consumed is:
Raw Material Consumed = Opening Stock + Purchases – Closing Stock
Substituting the given values:
= ₹ 25,000 + ₹ 1,00,000 – ₹ 40,000
= ₹ 1,25,000 – ₹ 40,000
= ₹ 85,000
So, the total value of raw material consumed during the period is ₹ 85,000.
This helps in determining the cost of production accurately.